Baby Boomers are the largest generation in America, and they have shaped American culture. This generation has created iconic businesses that still exist today including Apple Inc., McDonald’s Corporation, and Nike Inc. They were raised by an era of prosperity, which left them with a strong work ethic to maintain their success. Baby Boomers will be retiring soon and there is no one to replace them at their current rate of production.
The baby boomer generation is characterized by a large population of people who were born in the years following World War II, and are now at or near retirement age. This sample will explore how this demographic is changing the landscape of America’s workforce.
Introduction – Baby Boomers Essay
Baby boomers can be characterized as the people who were born between 1946 and 1964. The entrance of baby boomers in the USA and other western countries was after the Second World War. Baby boomers have covered a remarkable portion of the total population of the USA. Due to this reason, most of the business organizations in the USA make their business plans and marketing campaigns by taking the needs of the baby boomers into consideration. Baby boomers are considered to be the wealthiest section of the USA’s society.
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Consumer behavior and patterns in regards to baby boomers
The perception, attitudes, and motivations are characterized as the psychological factors which have an impact on the purchasing decision or buying behavior of consumers. Perception can be referred to as a process or phenomenon wherein people select, receives, and interprets external stimuli with the help of the five senses (Kardes, Cronley, and Cline 2010). For instance, while buying any life insurance scheme, people usually have a perception that the insurance scheme will help them in dealing with the uncertainties of life. The perception of every customer towards their purchase differs from each other. Perception teaches people how to act. Like perception, attitudes, emotions, and motivations also hold an important place in understanding the purchasing behavior of customers.
The customers effectively manage their attitudes and emotions, while purchasing any products or services. The decisions of customers towards what to purchase and what not to purchase are influenced by factors like perceptions, attitudes, emotions, beliefs, and motivations. The attitude of baby boomer consumers in the context of life insurance products can be understood as the feelings, emotions, beliefs, and behavioral intentions of baby boomer customers towards life insurance products.
The generation of baby boomers does not feel older and actively participates in all the activities which are performed by other generations, as they believe in taking their own action. The baby boomers are retiring, that is why they are taking a high interest in investing in life insurance schemes for securing their future. The generation of baby boomers has a strong belief that innovative life insurance products and schemes offered by business organizations will provide them adequate coverage and protection when they are elderly for their money (Kostel and Kostel 2010). Thus, they present good business opportunities for promoting their products and increasing their profits to the organizations dealing with life insurance programs.
The major spending of baby boomers on life insurance products and services in the USA reflects their positive attitude towards life insurance. In the present business scenario of the USA, the baby boomers over the age of 50 years spend more on life insurance to protect themselves from the uncertainties of life. The majority of baby boomers in the later stage of their life spend more on life insurance, as they believe that life insurance can be a valuable source of income for them, and the amount which they have invested into the life insurance plans will definitely come in handy to pay expenses. The size of the family also often motivates baby boomers to spend on life insurance plans (Moschis and Mathur, 2007). The increasing life expectancy highly motivates baby boomers to purchase life insurance. The people in the younger generation, particularly, the younger baby boomers think more about investing in life insurance plans, as they think that it will provide them financial security at the time of dealing with challenges of life such as the accumulation of sufficient savings for retirement (Supan and Brugiavini 2002).
Decision-making process
The effective analysis of the decision-making process of consumers in making any purchase decisions for marketers in making their marketing successful. The decision-making process of customers comprises five stages; problem recognition, information search, evaluation of alternatives available, purchase decision, and post-purchase decision (Hoyer, Macinnis and Dasgupta 2008). The decision made by baby boomers in the USA is quite interesting. The generation of baby boomers in the USA has emerged as influential, smart, and savvy customers. The baby boomer generation of the USA follows various considerations while making their decisions regarding the purchase of products and services.
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In relation to life insurance, baby boomers have a positive perception and attitude towards purchasing life insurance products. The life expectancy of this generation is also increasing in British countries significantly (Hoyer, Macinnis, and Dasgupta 2008). The generation of baby boomers in the USA is more conscious of their purchasing decisions than other countries as while making any purchase regarding life insurance, this generation looks for the benefits of life insurance schemes. They are price conscious too, as they always look for the value of their money investment life insurance products. They are also brand conscious, as they prefer brand name and quality of services while investing in the purchase of life insurance.
Certain other factors are also taken into account by baby boomers while purchasing life insurance. For instance, while making a purchasing decision for life insurance, baby boomers consider the facts; how much money is needed for fulfilling the needs of their children? How much money is required in paying for the education of each child? How they will survive and manage their lives when their youngest child leaves them alone, and how much money is needed for providing financial help to their spouse until their retirement and during that retirement. Most of the above-mentioned questions are considered by baby boomers while making the decision for purchasing a life insurance policy (DeVaney 1995).
Identity and Self-concept issues
At an old age, identity issues become important as old people don’t have the same identity as they used to have at a young age. Baby boomers favor individualism and they want to possess their own identity in front of the world. So, in order to maintain their identity at a significant level, they tend to invest in some life insurance policies, so that they can remain independent even after retirement. According to the self-concept issues, it is apparent that baby boomers possess a different concept of life security compared to second-generation people. This difference in self-concept leads to the creation of critical issues for baby boomers when they make a decision regarding the purchase of life insurance policies (Kitcho 2007).
Baby boomers are investing in long-term care insurance so that they can ensure the care they may need in their old age. Moreover, they are willing to make long-term insurance as a part of their retirement planning. Baby boomers have large disposable income and they can invest in their life insurance to secure their future. It is evident that the baby boomer generation has been raised in such a manner that they can live independently and have a strong belief that they can control their own destiny. Baby boomers are struggling to find a happy and appropriate medium between financial security and happiness (Roberts and Manolisv 2000).
However, the challenge for the life insurance industry lies in maintaining the correct balance between what you aspire to and what are the practical scenarios. Therefore, insurance underwriters are interested in taking their efforts of marketing directly to baby boomers with the help of direct-response advertising, online sales, etc.
Baby boomers can be referred to as demographic engines that can bring in a societal change in any nation. It is believed that the baby boomer generation of Europe has set the trend of a healthy lifestyle in old age. Due to a sound and healthy lifestyle, baby boomers live longer and are retiring at a late stage. This reveals the fact that the life expectancy of baby boomers has increased and they are living longer. The outcome of this is that they are earning a lucrative amount of money in their career and this enables them to implement practices related to life insurance so that their growing financial needs can be addressed properly and effectively. The economic status of British people is quite sound and strong and it helps them in preparing for the care they may need in their future after retirement. In order to fulfill this purpose, they include the practices of additional life insurance when they are near their retirement so that they can maintain their trendy lifestyle even at an old age. They need funds to maintain their lifestyle (Moschis and Mathur 2007).
The lifestyle of baby boomers includes eagerness towards taking risks, search for instant gratification, and willingness to job-hop. In addition to this, their lifestyle implies that young individuals will borrow and go for life insurance policies if they expect an increase in income in the future and have a preference for steady consumption. Individuals in the baby boomer generation tend to save more proportion of their income when they come in the years approaching retirement.
By the end of 2012, the baby boomers will approach their retirement age that would result in extremely rapid growth in senior citizens of the USA which would enable the life insurance sector to attract these baby boomers with their lucrative schemes. For example, AXA Equitable, which is a life insurance company, has increased the maximum age at which customers can buy cash-value and variable life insurance. The age varies from 75-85 years. Another insurance company, named Principal Financial Group offers some of its products, such as permanent life insurance to people having age up to 90.
Conclusion – Baby Boomers Essay
Baby boomers in the USA constitute a major part of the consumer segment and market. Due to an increase in the number of old people in the population which can be attributed to the increase in life expectancy of this generation, there exists a large section of baby boomers in the USA. The decision-making process, consumer perception, attitude, and motivations of baby boomers, identity and self-concept issues, sub-cultural effects, and lifestyle trends of baby boomers differ from other subcultures and require specific attention as far as the life insurance sector is concerned. All the members of the baby boomer section prefer individualism which means that they are concerned about maintaining their individuality throughout their lifespan. The consumer behavior pattern of baby boomers indicates a great scope for the life insurance sector of USA, as life insurance help the generation of baby boomer to secure their future.
Life insurance companies in the USA should focus on making baby boomers more aware of the benefits of life insurance products and schemes. In addition to this, there should be additional facilities, such as e-commerce for providing convenience to baby boomers in regard to purchasing insurance products and schemes.
References
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