Going After the Mightiest Market

By John S. DeMott

Madison Avenue aims anew at the baby-boom generation

Almost any night on prime-time television, Yankee Pitcher "Goose" Gossage, 30, urges adults to "take a powder" with Johnson's baby powder, and Annette Funicello, 38, the onetime Mouseketeer who frolicked in the beach-blanket movies of the early 1960s, plugs the virtues of Skippy peanut butter. In radio commercials, Peek Freans are presented as a "serious cookie" too good to "waste on children," and jeansmaker Levi Strauss & Co. promotes its Levi's for Men line of pants by promising "the comfort you loved as a boy, the fit you need as a man."

Those jolly folks on Madison Avenue are at it again, revealing more about major American social trends than many of the programs their heavy selling efforts subsidize. While 15 years ago advertisers were concentrating on "the youth market," today they are aiming at those same people now transformed into adults. This is the group that the New York advertising agency Batten, Barton, Durstine & Osborn in 1964 dubbed "the Pepsi Generation." But their buying tastes are changing along with their age, and market people are adapting products and advertising pitches to come up with whole new lines of goods for the baby-boom adults.

The market target is massive. Seventy-six million people, nearly one-third of the U.S. population, were born between 1946 and 1964. Moreover, now that they are mostly in their 20s to mid-30s, many baby-boom adults are taking home big paychecks for the first time. Population experts refer to this as "the pig in a python" phenomenon because demographic charts today resemble a snake that has just swallowed something huge. The people born during the baby boom form a large group that comes between two periods of baby bust: the Depression and the 1970s. The boom is slowly working its way through society, and is now reaching the center point. Says Consumer Researcher Fabian Linden: "The baby-boom generation is not some esoteric Indian tribe but is now the hard core, the mainstream, of the population of the U.S."

In the 1970s, the baby-boom children were "singles," the glamour class of childless sybarites that had responsibilities to no one other than themselves. A decade later, they are dropping anchor. Harvard Demographer George Masnick foresees them aspiring "to put down roots, to plant gardens, to rake the leaves." Already, says he, "young men and women are moving to the country in droves, trying to get away from the singles bars, the single apartment complexes."

What most interests marketing people and admen about the baby-boom adults, though, is the collective size of their paychecks. In 1970 the mean annual income for a 25-to 34-year-old was $6,828. By 1980 that had almost doubled, to $13,201, or a nationwide total of $424 billion. By 1990 it could reach $1.2 trillion, equal to about half the entire U.S. gross national product last year.

What baby-boom adults do with all that money is revealing. Studies show that 25-to 34-year-olds are among the biggest buyers of such items as major appliances, furniture, curtains, rugs and housewares. They also have more discretionary income to plunk down for travel, fancy electronic gadgetry and other luxury goods: approximately $4,600 a year if they earn the current national mean household income of about $20,000, according to one study by Ted Bates & Co., the fifth largest U.S. ad agency. What is more, they spend money fast. The baby-boom generation is also the credit-card generation. Economists estimate that a major cause of the low U.S. savings rate, less than 5% of earnings, is that so many baby-boom adults are fast approaching their peak spending and borrowing years.

The road ahead, however, is not as paved with riches as Madison Avenue would like to believe. The baby-boom group is not all homogeneously wealthy, upscale, dual career types who snap up gold Rolex watches or flashy sports cars. Richard Carlson, a Stanford Research Institute senior economist, believes that the affluence of the baby-boom generation has been overestimated. Those born before 1955, the "first wave," are indeed in a social and economic position to fulfill Madison Avenue's wildest dreams. But those born after that, he says, were greeted in young adulthood by recession, rising housing costs, steep interest rates and high unemployment. Some do not have enough money left over to buy even record albums, which were practically the birthright of those born in the early 1950s. During the past two years, sales of recorded music dropped from $4.1 billion to $3.7 billion. Says Carlson: "The whole concept of one general ad and one general audience is already dead, and advertisers are just starting to figure that out."

The rush is on, though, to lure dollars from the richer baby-boomers, those in their early 30s. Says Adman Jerry Delia Femina in awe: "They are the biggest single factor in anyone's marketing calculation. They are the people who make or break products." But winning them is not an easy task because of a couple of other characteristics: a high level of education (25% of the generation have college degrees, vs. 10% in 1950) and an insistence on quality. Writes Landon Y. Jones, 37, in his lively 1980 "biography" of the baby-boom generation, Great Expectations: "Trained in rational decision making--to compare, question and analyze--baby-boomers as a group are far less likely to follow brand loyalties. On the other hand, they are more likely to appreciate the differences that quality can make. They do not buy just any stereo set; they buy the best stereo set. They do not buy any tennis racquet; they buy the best tennis racquet." Introducing new products is one way to get at the dollars of the baby-boom generation, although doing it can be tricky and expensive. It requires hitting the right notes by sensing attitudes and styles of living at the right moment. The Cuisinart is Author Jones' favorite example. Says he: "It is the consummate baby-boom product. It saves time and is used for the sophisticated meals favored by the educated and affluent." Cuisinart sales have exploded since the company was founded in 1971, with the greatest gains in the past five years.

Another entree: a la Carte-brand foods from Kraft. They are single-serving main dishes, like beef burgundy or creamed chicken, which are neither frozen nor canned but packed and vacuum-sealed in a new kind of aluminum and plastic pouch that can be stored on a shelf, popped into boiling water and eaten in five minutes. Kraft publicity identifies the market as: "Dual income families, working single parents and single people who lead active lives." Kraft is pleased with test-market results of a la Carte in half a dozen cities, and the product will soon be sold nationally.

Microwave ovens, made for home use since the mid-1950s but only truly popular in their newer, "safer" versions since the early 1970s, are seen by some experts as the coming gadget for the 1980s and beyond. Says Harvard's Masnick: "You can come home from work, take the chicken out of the freezer and have it on the dinner table in an hour." Also useful, says he, for houses where both spouses work, are security systems "to protect homes that stand empty all day."

A major way that companies have changed to meet the demands of the dominant consumer group is to "reposition" products through advertising, as they say along Madison Avenue. This means trying to make an existing product appeal to a new audience. Snickers candy bars, for example, are now being sold by actors in hard hats on television, who declare: "I can eat a Snickers, go back to work and not worry about being hungry until it's time for lunch." Johnson & Johnson is currently pitching its baby-oil, baby-powder and baby-shampoo ads directly at adults, often with the help of endorsements by sports stars past their 20s. Ad copy for Levi's Womenswear reads: "I wear Bend Over clothes every place. I'm old enough to know what I want. And young enough to get it!"

Everywhere the baby-boom generation is being massaged for its money. Retailers, for example, have discovered that these people are laying aside the sloppy attire of the 1960s. And even the fall catalogue of L.L. Bean, the Freeport, Me., sporting goods store, offers dressy shirts and slacks. In the 1970s, one of Bean's big sellers was hiking boots; now it is plain-toe, lace-up shoes. Says Director of Product Management Charles Kessler: "We're seeing the dress-up tendency."

Electronic games, at first turned out mainly for teenagers, have become elaborately complicated to appeal to adults. At least one toymaker, Mattel, is now making a home computer in an attempt to make up for lost toy sales in the downsize baby market.

Seeing that affluent members of the generation prefer foreign cars, Detroit's automakers are counterattacking. One entry: Cadillac's Cimarron, whose hefty price of $12,000 and up has not discouraged sales thus far, and should not if General Motors' calculations prove correct. The company has found that during the 1980s, the number of people in the 35-to-44 age bracket earning more than $35,000 should grow by 129%. As in many other businesses, Detroit knows that those baby-boom consumers will be fueling its sales for years to come. --By John S. DeMott.

Reported by Bob Buderi/San Francisco and Denise Worrell/New York

With reporting by Bob Buderi, Denise Worrell

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