1. Organization in
Context
Individual Coursework
Deniz Kurugollu (10283502)
MSc Marketing
13.12.2010

2. Table of Contents
Executive Summary .............................................................................................................. - 2 -
Older consumers .................................................................................................................... - 2 -
Older consumers in fashion ................................................................................................... - 2 -
Older consumer in marketing ................................................................................................ - 3 -
Conclusions & Recommendations ........................................................................................ - 3 -
Distinctive capabilities: ..................................................................................................... - 4 -
Core competencies:............................................................................................................ - 4 -
References ............................................................................................................................. - 5 -
Appendix 1: Projected UK population by age ...................................................................... - 7 -
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3. Executive Summary
Statistics shows that the world‟s population is aging at a rapid rate. In particular, in Europe by
2050, the number of people over 60 will be expected to double. The aim of the report is to
evaluate the aging population phenomenon from the fashion and marketing points of view,
and the implications of this for Marks & Spencer in relation to older customers. Finally,
recommendations based on the resource based view will be produced.
Older consumers
Demographic changes within the population show that older age groups will continue to grow
(Appendix 1). In addition, birth rates across Europe are falling. It is estimated that by 2050 the
number of people over 60 in Europe will be by 40 per cent of the population (BBC, 2002).
The elderly are the biggest spenders in the market in comparison to any of the other groups.
They are becoming more affluent as they age. Their purchasing power is very high (Iyer,
2009). Donald (2000) also points out that 50 plus age consumers in the market have 30 per
cent more disposable income in comparison to under-50s. According to Verdict (2010), 50
plus consumers account for 40 per cent of total consumer spending. Many older people are the
consumers who have money and willing to spend it. (Thomson and Thompson, 2009).
However, older people compare to the younger groups, are more likely to trade down and cut
back than to spend. They look for value and invest in something trusted (Mintel, 2010).
Older consumers in fashion
Research by NPD Group shows that elderly women account for 25 percent of the $100 billion
total women‟s apparel sales (Iyer, 2009). According to International Council of Shopping
Center (2003), older consumers are the big spenders at malls and departmental stores.
Rocha et al (2005) concluded that the aging baby boomers have changed the traditional
stereotype of older people. They want to be physically active as well as psychologically
young. Old consumers do not like to be reminded that they are old. Mentally most people over
the age of 50 probably still see themselves as in their 30s (Donald, 2000). They are still highly
interested in fashion and older celebrity role models. They want clothes that are relevant to
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4. suit them considering the age fact, but at the same time they want to look fashionable (Mintel,
2010).
Research (Iltanen, 2005) shows that middle-age women complain that they cannot find
clothes that would please them. According to the study, designers were asked to describe
clothes for the older female market. The results were the garments with high necklines, long
sleeves, and longish tops. It therefore frustrated elderly consumers that they were not the
target for stylish fashion designers. Rocha (2005) reveals that older consumers look for
fashion products to be not only ergonomic (accepted as a key factor for developing products
for older people), but to be stylish and to reflect their own lifestyles.
Older consumer in marketing
Li (2003) states that there is a need for developing a new business model in designing,
manufacturing and retailing in order to cater for emerging older age group. Thompson and
Thompson (2009) suggest that marketing activities need to focus on improving such
components as service, value and loyalty, due to aging consumer base. Reicheld (1996)
indicates that loyalty is related to value creation. On the other hand, Brown (2001) reveals that
elderly consumers are not more brand loyal than other consumer groups. They make careful
assessments of the quality of competing products.
Sudbury (2009) points out that the older end of the market is not homogenous; in fact
substantially diverse. Barak and Shiffman (1981) state that one method of differentiating older
consumers is by the cognitive age. Segmenting consumers according to their self-perceived
age may therefore be a useful approach (Carrigan and Szmigin 2001; Wei 2005).
In terms of marketing communication, press may well suit for reaching older people because
they want to digest messages. Direct marketing can work well. These people are much more
likely to answer the phone and read mail than younger people. Advertising should have clear
structures with simple selling messages that they can decode easily (Donald, 2000).
Conclusions & Recommendations
In terms of the level of turbulence in the market, the aging population fact is predictable,
which means the future visibility is available and the rate of change can be monitored. Data
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5. show that older age groups will continue to grow, so the phenomenon is clear and serious.
The emerging aging population in Europe is obvious and the level of impact on M&S is high.
It can therefore be suggested that this phenomenon should be monitored closely and long-term
plans should be developed to meet these emerging customers‟ needs and wants.
Resource based view refers to seeking a long-term fit between the needs and demands of the
market and the organisation‟s abilities to compete in the market (Hooley, 2008). Lynch (2006)
states that resource based view of strategy development focuses on the organization‟s own
resources in order to achieve its goals and objectives rather than strategies which are common
in the industry. Two components can be related to the resource based view; distinctive
capabilities and core competences (Kay, cited in Lynch, 2006). Based on this approach the
followings can be noted for M&S:
Distinctive capabilities:
a. Architecture: Considering the facts in the „older consumers in fashion‟
section, it may be inferred that M&S should allocate more resources for
clothing designs in order to meet these emerging groups‟ demand. More
stylish, trendier designs for older consumers can be offered under sub-brands
of the company. Hence, M&S should use the network of relationships with its
suppliers, designers and manufacturers so as to offer more fashion-driven
products for older consumers.
b. Reputation & Knowledge-based advantage: M&S has already a good
reputation and brand awareness among the older age women in the market
since the company mainly target 40 plus consumers (Mintel, 2010). In
comparison to its competitors targeting the young such as H&M, Zara, Next,
Topshop, River Island, it can be noted that the company has a knowledge-
based advantage over the older consumers.
Core competencies:
c. Competitor differentiation & customer value : Focusing on the older end
of the market, in other words, leaving the crowded young fashion market to the
competitors can be seen as a good strategy. Therefore, the increase of older
population can be seen as an opportunity for the company. M&S should
continue to serve for this target audience by taking advantage of its knowledge,
reputation and core values – „quality, value, service, innovation and trust‟
(M&S, 2010).
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6. References
 Barak, B., & Schiffman, L. G. (1981) „Cognitive age: A non-chronological age
variable‟. Advances in consumer research. Vol. 8, pp.602–606.
 BBC (2002) „Aging: Europe‟s growing problem‟. [Online]. Available at:
http://news.bbc.co.uk/1/hi/business/2248531.stm [Accessed 8 December 2010]
 Brown, S (2001) Marketing: The Retro Revolution. 1st ed. London: SAGE Publication
Ltd.
 Carrigan, M. and Szmigin, I. (2001) „Learning to love the older consumer‟. Journal of
Consumer Behaviour. (1) 1. pp. 22-34
 Helen Donald (2000) „Glad to be grey?‟. [Online]. Available at:
http://www.marketingweek.co.uk/home/glad-to-be-grey?/2049144.article[Accessed 8
December 2010]
 Hooley, G., Piercy, N. and Nicaulaud, P. (2008) Marketing Strategy and Competitive
Positioning. 4th ed. Essex: Pearson Education Limited
 ICSC (2003) ICSC Research Quarterly. Volume 10. Number 2. [ Online]. Available
at: http://www.icsc.org/srch/rsrch/researchquarterly/current/rr2003102/trends.pdf
[Accessed 10th December 2010]
 Iltanen, S. (2003) „Ageless and ageing: a survey of fashion designers and their
conceptions of the target group‟. Royal College of Art, London.
 Iyer, R. (2009) „The aging population- a new growth market‟. Bradley University.
[Online]. Available at:
http://docs.google.com/viewer?a=v&q=cache:VXljefpXiBIJ:www.iatto.org/forum/Do
cFile/89359_Rajesh%2520Iyer,%2520The%2520aging%2520population%2520%25E
2%2580%2593%2520a%2520new%2520growth%2520market.pdf [Accessed 7th
December 2010]
 Keynote (2009) Clothing Retail Market Report Plus. [Online]. Available at:
http://www.keynote.co.uk/market-intelligence/view/product/10322/clothing-
retailing?utm_source=kn.reports.browse [Accessed 8th December 2010]
 Li, Z. (2003), “Functional clothing design for the active grey market”. Royal College
of Art, London.
 Lye, A., Shao, W. and Thiele, S. (2005) „Decision waves: consumer decisions in
today‟s complex world‟. European Journal of Marketing. 39 (1). pp. 216-230
 Lynch, R (2006) Corporate Strategy. 4th ed. Essex: Pearson Education Limited
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7.  Mintel (2010) Clothing retailing- UK. Available at:
http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id
=479925/display/id=551238?select_section=551243 [Accessed 10th December 2010]
 M&S (2010) Company Overview. [Online]. Available at:
http://corporate.marksandspencer.com/aboutus/company_overview[Accessed 10th
December 2010]
 Reicheld, F. (1996) The Loyalty Effect: The Hidden Force Behind Growth, Profits and
Lasting Value. USA: Harvard Business School Press.
 Rocha, M., Hammond, L., Hawkins, D. (2005) „Age, gender and national factors in
fashion consumption‟. Journal of Fashion Marketing and Management. 9 (4) pp. 380-
90.
 Sherman, E., Shiffman, L., Mathur, A. (2001) „The Influence of Gender on the New-
Age Elderly‟s Consumption Orientation‟. Psychology & Marketing. 18(10) pp.1073–
1089
 Sudbury, L., Simcock, P. (2009) „A multivariate segmentation model of senior
consumers‟. Emerald Group Publishing Limited. Journal of Consumer Marketing. 26
(4) pp. 251–262
 Szmigin, I., Carrigan, M., (1999) „The representation of older people in
advertisements‟. Journal of the Market Research Society, Vol 41 pp. 331–322
 Thompson, N. J. and Thompson, K. (2009) „Can marketing practice keep up with
Europe‟s ageing population?”. European Journal of Marketing. 43 (11/12) pp. 1281-8
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8. Appendix 1: Projected UK population by age
Table A: Projected UK population by age
2006 2011 2016 2021 2026 2031
Age Group
0-14 10,737 10,912 11,428 11,947 12,026 11,974
15-29 11,876 12,614 12,458 12,024 12,191 12,706
30-44 13,302 12,699 12,691 13,492 14,132 13,975
45-59 11,744 12,295 13,094 12,986 12,398 12,420
60-74 8,269 9,265 9,824 10,432 11,035 11,802
75 and over 4,659 4,975 5,480 6,309 7,477 8,223
All ages 60,587 62,761 64,975 67,191 69,260 71,100
Source: Keynote (2009) Clothing Retailing Market Report Plus
Keynote (2009) states that the rapid growth in the UK population is „inevitably
expanding the overall market for clothing in the UK. According to official projections, the
UK‟s population is set to grow to 71 million in 2031, from 60.6 million in 2006. Furthermore,
Eurostat has forecast that the UK population will grow from its current figure of 61.9 million,
to nearly 77 million in 2060- an increase of 24.4%. However, demographic changes within the
population will not be positive for the clothing market. The proportion of children in the UK
(those aged under 14)- a key growth area for clothing sales- is set to fall from 17.7% in 2006
to 17.6% in 2016 and 16.8% in 2031. Meanwhile, the 30 to 44 year-old age bracket (another
key group for the market) is also forecast to decrease, from 22% of the total population in
2006, to 19.5% in 2016, although it is expected to increase slightly to 19.7% in 2031.
Figure 1: Projected UK Population by Age
16
14
12
0-14
Million people
10 15-29
8 30-44
6 45-59
4 60-74
75 and over
2
0
2006 2011 2016 2021 2026 2031
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