PROS Nadia Vita H, John J.O.I. Ihalauw Understanding Characteristics fulltext
3rd Economics & Business Research Festival
13 November 2014
UNDERSTANDING CHARACTERISTICS OF ELDERLY HIGH END
CUSTOMERS AND THE INFLUENCE TOWARDS BUYING
INTENTIONS
Nadia Vita Hairodin
Business School, Universitas Pelita Harapan
nadiavitahairodin @ gmail.com
John J.O.I. Ihalauw
Business School, Universitas Pelita Harapan
john.ihalauw @ uph.edu
ABSTRACT
The world's population is aging. Elderly consumers (50+) are increasing and becoming
attractive target market. However, in Indonesia, there have not been many research conducted in
studying the elderly. The fact that they are still active, dynamic, able and willing to spend is
overlooked. Seeing this gap, this research is undertaken to understand the current condition of elderly
consumers and how it affects their buying intentions. This qualitative research is guided by several
theoretical foundations and carried out through data triangulation with four key respondents from
high end class with age range of 53 to 71 years old. The result and discussion show that apart from
age and socioeconomic status there are many factors that significantly influence their buying
intention such as, attitude on retirement, household life cycle, health, perceived age, activities and
occupational background. The linkages of all these variables are depicted in the proposed minitheory which summarizes of the research results. In the future, there will be researches that could be
conducted to explore each of the aforementioned propositions with more diverse respondents'
background.
Keyword: elderly consumers, perceived age, activities and occupational background, attitude towards
retirement, health, buying intention
INTRODUCTION
The world's population is aging, including Indonesia. In 2012 there were already 18.55
million citizens aged above 65 years old (7.78 percents of Indonesian population) with the average
life expectancy of 72 years old (Kompas 2012) (Badan Pusat Statistik 2013). In social and health
studies, senior citizens arc defined as those whom are above 65 years old. In marketing, however,
grey market (seniors) are those above 50 year's old (Karani 2010). This means the number of senior
citizens is even bigger. Statistics Indonesia projected that in 2020 grey market will form 20 percents
of total projected population (Statistics Indonesia 2005). Moreover, the over 50s own around threequarters of the world's financial assets and discretionary budget (Hooley et al. 2012).
Other than being active, senior citizens as consumers are actually facing more life changes
than ever before. The research by Roper Starch Worldwide Inc revealed that life of the people in their
50s is far from "settled". Changes in diet, family structure (grandchildren, death, children leaving the
house, children getting married), and career are happening in the 50s more than other life stage
(Silvers 1997). In addition, elderly consumers arc experiencing significant physical and cognitive
decline which affect their needs and wants and behavior as consumers. Therefore, elderly consumers
:
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or grey market is not as dull as commonly perceived. They arc dynamic, active, having more needs
than before and many of those needs are unmet by what is being offered in the market.
This present research seeks to understand the current condition of elderly consumers and how
it affects their buying intention so that in the future, company can serve them better. This study
focuses on understanding the distinctive characteristics of elderly consumers within upper-middle to
lower-upper socioeconomic classes and its influences on their buying intention. Three research
problems are:
1. What axe the backgrounds of elderly consumers of the upper-middle and lower-upper socio
economic class?
2. What are the activities and interest of the elderly consumers?
3. How do all the factors above affect buying intention?
THEORITICAL GUIDES
Kotler and Keller define , "Marketing is about identifying and meeting human and socialneeds" (201227). Marketers seek to identify these needs by first, understanding who their customers
are. Customers can be classified into different groups based on key customer market. There arc four
different types of customer market, namely: consumer market, business market, global market, and
non-profit and governmental market. This research focuses on consumer market. To further
understand consumer needs and desire, understanding of consumer behavior is essential.
Consumer behavior is "the study of individuals, groups, or organizations and the process they
use to select, use and dispose of products, services, experiences, or ideas to satisfy the needs and the
impacts that these processes have on the consumer and society/' (Hawkins 2010). Specifically, this
research will focus on buying intention. Intention is the subjective possibility of individuals to do a
certain behavior, in this case buying products or services.
Different groups of consumers with diverse needs and wants lead to market segmentation that
divides market into well-defined slice, consisting of customer with similar" needs and wants. (Kotler
2012). Segmentation reveals important differences that can be acted upon (Plummer 1974). This
research focused on upper middle and lower upper socioeconomic classes and age as its segment to
study.
The upper-middle group consists of successful professional, independent business people and
corporate managers. (Hawkins 2010). Their purchases are directed at projecting successful image.
These individuals tend to be confident and forward looking. They put importance in getting good
education for their children to make sure their children have the same lifestyle.
The lower-upper group is usually working as highly successful professional, entrepreneur
(Hooley, et al. 2012). Many engage in conspicuous consumption by purchasing and using luxurious
products and service to demonstrate great wealth (Hawkins 2010). High status brand and activities are
actively sought by this group.
Age is one of the non-marketing-specific factors within demographic characteristic (Hooley et
al. 2012). Age plays a factor in evolving wants and needs (Leventhal 1997). Consumer behavior is
also influenced by age because it carries culturally defined behavioral and attitudinal norms (Hawkins
2010), different age group will have different approach towards consumption and marketing.
From psychological view, the elderly doesn't only age biologically but also continues to
develop psychologically in the course of their life. Development itself means a systematic process of
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adaptive change in behavior in one or more directions (Papalia, et al. 2007, 4). Most psychologists
today accept the idea that human development goes on throughout life. Baltes (Papalia, et al. 2007)
identified that development is lifelong, depends on history and context, multidimensional, and pliable.
Though not as significant as young adults, the elderly persons still need activities to maintain and
improve their skill.
A person can age in a number of ways and each type of age may not be in sync with one
another (Papalia, et al. 2007). Chronological age is simply a count of how many times an inhabitant
of the planet has orbited the sun. Functional age is a measure of how well a person can function in
physical and social environment as compared to other people with the same chronological age.
Biological age is a measure of how far a person has progressed along potential lifespan; measured by
physical condition. Psychological age depends on how well, in comparison of same-aged peers, a
person can cope with environmental challenges. Social age depends on how closely behavior
conforms to the norms, expectancies, and roles of a person in certain age are expected to play in
society. The elderly should be seen from their chronological age as well as functional, psychological
and biological that in totality shapes cognitive age. Cognitive age refers to one's perceived age, a part
of self concept (Hawkins 2010); it is a more accurate measure for behavior because it affects selfconcept and lifestyle. This imply that consumer with same chronological age may not behave the
same way if they have different cognitive age.
Mature market has the longest segments of life averaging about 29 years (Silvers 1997).
Within these 29 years of life, a lot of life-changing events will occur. Experiencing life-changing
events become one of the prominent characteristics of grey market. Some of the life-changing events
experienced are loss of spouse, survived from major illness, retired from job, major diet change due to
health, loss of mother, adult child move back home, menopause, responsible for parental carc, last
child move out, loss of a father, became a grandparent (Silvers 1997). The turbulence in the life of
grey market customers lead to changes in attitude, outlook of life, behavior and consumer buying
behavior as they reevaluate their wants, needs, goals and role both on personal and consumer levels
(Silvers 1997).
It is a natural process for elderly consumers to experience physiological changes. These
changes will create new needs and benefit sought. In physical appearance, skin tends to be paler and
splotchy; it takes on parchment like texture loses elasticity, hangs in folds and wrinkles. Varicose vein
of the legs arc more common. Hair turns white and thinner, it starts to grow in new places (woman's
chin, man's ear). They may become shorter as disks between spine atrophy. (Papalia, et al. 2007) .
These changes will create new benefit sought in various products.
Not only physical appearance, sensorimotor functioning tends to decline in the late adulthood albeit
with individual variations. Forms of sensorimotor function decline may take form vision, hearing,
taste and smell, touch, pain and temperature, and motor functions (Papalia, et al. 2007)
RESEARCH METHOD
This research employed qualitative method. In qualitative study the goal is the development
of concepts which will help in understanding social phenomena in natural settings, giving emphasis in
the meanings, experiences and views of participants (Ihalauw 2011), (Hooley, et al. 2012)
The research used descriptive case study design that describes the characteristics of persons,
events or situations (Sekaran and Bougie 2013) (Ihalauw 2011). Multiple sources for data
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triangulation is employed in the study, namely in-depth interview, direct observation and the use of
archives and other secondary data.
In-depth interview is conducted to unearth detailed information about a person's thought and
behaviors or want to explore new issues in depth (Boyce and Palena 2006). In this research, the
interviews were conducted in the span of 60-120 minutes. The interviews were done by meeting face
to face. There are four respondents in the age of 50-69 years old. The respondents are from Surabaya
within upper-middle and lower-upper social status.
Verification of data is achieved through convergence of the respondents' answers. Reliability
of this research is achieved through maintaining chain of evidence, by maintaining accurate and
detailed record of the interview transcripts, interview questions and observation, down to the analysis
and conclusion.
According to Tesch (Ihalauw 2011), in qualitative research there is no specific "right way" to
analyze the data. The foundations of qualitative analysis axe data reduction and interpretation. The
abundance of data should be processed into categories, pattern or theme and interpretation using
certain scheme. Therefore, the data analysis will be conducted in the following steps:
•
Extracting the essence of interviews; the researchers read and re-read interview
transcript, write notes as ideas and insights came. Make summary in forms of topics,
and categorize them into important, secondary, unique and irrelevant.
•
Build categories from essence of interviews; using the list of topics, summarize them
using codes, give accurate descriptive formulation.
•
Formulate pattern of answers; these patterns are the explanation for each category
•
Identify and label pattern of answers; important aspects in pattern of answers must be
identified and labeled correctly.
•
Concept formulation; as pattern of answers are being identified and labeled, concept
will emerge. These concepts must be conceptually defined.
•
Formulate propositions; propositions are constructed by logically connecting two
concepts (Ihalauw 2008)
•
Construct a Mini-theory; mini-theory is a theory that is applicable to a particular
situation, it is developed by connecting one proposition with another. (Jonker and
Pennink 2010)
RESULTS AND DISCUSSIONS
This section will present respondent backgrounds, results and discussion of the research. The
following table contains the profile of the four respondents in the interview. It is the descriptive
formulation of the category of answers extracted from the interviews.
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1.
2.
3.
4
XT
^
IName
Year of Birth
Age (2014)
Ctirrent Residence
Hometoun
5. Occupation
Fms
1961
53
Surabaya
Ruteng, East Nusa
Tenggara
Entrepreneur
* Logistic
Business
* Spare part Store
* Heavy
Equipment
Rental
Entrepreneur
* Real Estate
* Shoes Factory
a.
*
b.
«
Spouse
Husband
Daughters (3)
31,29, 18
years old
Franky
1948
66
Surabaya
Balikpapan,
Kalimantan
Entrepreneur
(Retired)
• Cement
Distributor
6. Family Member
a.
*
b.
•
7 Married children
None
• Two out of
three
• One daughter
out of three
None
Positive
Yes
Negative
Yes
Positive
8 Grand children
9 View on
Retirement
RESULTS
Spouse
Wife
Daughters (3)
23,21.14 years
old
Jiau Yin
1957
57
Surabaya
Surabaya
a.
e
h.
•
•
Spouse
Wife
Daughters (3)
Three daughters
38, 36 and 32
years old
Kaisouo
1943
71
Surabaya
Berau,
Kalimantan
Entrep teueur
* Logging
C ompany
* Sandal
Manufacturing
C ompany
• Shoes
Distributor
• Palm Oil
Plantation and
Refinery
a. Spouse
e Wife
h. Daughters (2)
* Two daughters
* 40 and 34
years old
e. Sous (2)
* 38 and 36
years old
• One our of two
daughters
• Two out of
two sons
Yes
Negative
RESULTS
As background characteristics, all key respondents currently live in Surabaya. However, only
one is from Surabaya, the three others came from small cities, Ruteng in East Nusa Tenggara,
Balikpapan and Berau in Kalimantan. All of them moved out from their parents' home since they
were in Junior High School for attaining better education. Since young age, they have been living
independently away from their parents. Those aged 66 and 71 were still able to study in Chinese
school while the younger ones (53 and 57 years old) went to study in Christian/Catholic school.
All respondents' parents were entrepreneurs. The younger key respondents followed the
tracks of their parents' business, whereas the older group opened completely different and bigger
business from their parents. Today, there arc wide ranges of business that these elderly arc involved in
logistic business, spare part store, heavy equipment rental, real estate, shoe factory, cement
distributor, logging company, sandal manufacturing company, shoes distributor, palm oil plantation
and refinery. Their education doesn't contribute to the business they are doing.
All of the elderly are manied with children and some already had grand children. The
younger group of key respondents still has children that depend on them, while the older group's
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children axe all independent of financial support. The younger group still takes care of their parents
and none had serious illness. While in the case of the older group, their parents already passed away.
Amongst the elderly, none of them has serious health problem that interferes with daily
activity, some of those hair problem are mere balding, pinched nerve on the neck and problem with
prostate. None of these health problem hinders their movement.
There are two differing opinion for retirement regardless of age. In this case it is more of a
personal value rather than age factor. Among the younger group there is different view between the
two respondents. While one seeks to be retired in the future to enjoy other things, the other seeks to
never retire until death and to continue working, and even admits that she feels sick when she is not
working.
In the older group the same case is present, while one is already retired; the other seeks to
never retire even at the age of 71 years old. The elderly in favor retirement sees retirement is essential
to good life. The elderly not in favor of retirement, sees retirement as death sentence.
There is wide range of interests amongst the elderly. From the interview results those interests
are opening new business, travelling, going to exhibition (spare part, heavy construction equipment
and new products), hunting for discounted spare part, music concert, off road driving experience,
meeting new people, learning singing, going to plantation and forest (business site).
Many of these special interests arc related to the elderly as entrepreneurs. There is a blurry
line between work and hobby. Their work is their hobby and vice versa. Among the elderly there are
also special interests that arc non-business related such as travelling, music concert, off road driving
experience, meeting new people, and learning to sing.
One of the aspirations in the future for one of the elderly is to enjoy retirement with passive
income. He aspires for business that doesn't need his day to day involvement so that he can have more
free time. The elderly are still actively working to ensure their business is growing. They are devoting
their time and energy in expanding their business. The elderly are also still excited to open new
business. Despite of their age they arc not afraid to start a new business. One respondent said that
without ambition, she is dead.
All of the elderly aspires to be healthy for the long run. This is the reason for their
consumption of supplements/vitamins, exercise, and careful observance of their diet. One elderly
stated that health is number one and that is why he chose to retire.
There arc varieties of leisure activities enjoyed by the elderly, those activities arc watching
TV, listening to music, social activity, shopping, body pampering, spending time with family at home,
watching Youtube, doing sport, learning new things, resting at home and reading books.
The younger group has wider social circle, such as high school friends, spare part enthusiasts,
friends from religious activities, business friends and others that arc not specified. This younger group
has taken the advantage of social network platform such as Facebook, Whatsapp Group, and BBM
Group to re-connect with old friends and to connect with more friends. The older group has more
limited social circle. Consequently the younger group also has more social activities, such as
gathering with friends, reunion with high school friends, religious activities (prayer gathering and
visiting religious places), travelling with friends, and shopping. The older group has considerably less
social activities and spending more time being home especially with family.
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All but one elderly are still actively working everyday with different intensity. There are not
many variety of sport enjoyed by the elderly. The varieties arc, badminton, working out at home, and
swimming.
To describe their behavior as consumers there arc several areas that will be discussed, such as
role as care giver, children's education, most enjoyable consumption, their preference for clothing,
their decision on purchasing clothing, preference for brands, price sensitivity, health related
consumption, aspiration for future, their physical limitation to shop, most convenient place to shop
and motivation to shop.
There arc several ways of spending money that is enjoyed by the elderly. There arc six
categories, namely, business related, hobby, social activities, accessories, investment and
family/household goods.
Business related arc spending that contributes to business growth/purpose. There is no clear
boundary between hobby and business, Therefore hobby-related most enjoyable purchases arc similarto business related purchases. Social activities related purchases arc the purchases done in social
setting or for social purposes. One of the respondents has hobby of collecting bracelet and necklace.
With huge discretionary income due to the success of the business of the respondents some of
them prefer to use their money in investment, such as land, factory building, and real estate. This
investment is done out of personal enjoyment and also generating profit. Family/household- related
most enjoyable purchase means the products that they enjoy purchasing arc those that can be enjoyed
by the family. There is also enjoyment in buying food, being old doesn't always mean forfeiting
enjoyment of food.
All of the respondents arc or were taking role as carcgivcr for their parents. Older respondents
no longer need to support their children financially while the younger respondents still need to support
their children. The youngest respondent (53 year's old) still has all of his children living in the house,
the two older respondent no longer support his children financially because they arc all financially
independent. One respondent has both financially independent and dependent child at the same time.
All of four respondents' children are studying or have studied in university. Three out of four
respondents chose to send their children abroad for education and the reasons are to train their
independence, children's own initiative and security and political issues back in 1998.
Among four respondents, three of them are involved in the purchase of their own clothes,
while one respondent expresses indifference in the purchase of clothing apparels. In buying they
consider fabric material (quality and origin), style, social influence and fit.
The elderly arc well acquainted with technology. Each of the elderly respondents has either
smartphone or tablet device or both. Technology has become part of their lifestyle, social networking,
watching Youtube, or learning to write mandarin on iPad.
Since none of them has serious health problems, none of them has significant medical
expenses. Multiple supplements and vitamins are consumed by three out of four respondents.
Information about multiple supplements is obtained from friends, wife, and recommended by doctors.
The elderly started to consume multiple supplements and vitamins once they reach middle-age and
doesn't stop ever since
With age, there is a great reduce of hair, an elderly claimed that he lost 70% of his hair. To
choose certain hair tonic product, the respondent relies on friends' recommendation, and then try it.
Other than consuming multiple supplements, the elderly are also careful about their diet. They eat
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more moderately, limit the consumption of unhealthy food, and go for healthier choices such as brown
rice, vegetables, fish, oatmeal and fruits. Special pillow is used for the elderly with pinched nerve to
avoid the pain. The elderly also exercise regularly; the younger age group is more irregular- compared
to the older one. The chosen exercises are light exercise and swimming.
None of the elderly profess physical limitation in shopping. Each of them in unanimously
choose mall as the most comfortable place to shop. They are different in their level of motivation to
shop. Some are still passionate about shopping while the others reduced motivation or indifference.
DISCUSSIONS
Based on the above mentioned results and the theoritical guides, this part presents the
discussion of each research problems.
By understanding the elderly consumers' history, current condition, family and opinion, this
study seeks to understand what motivates them and what makes them who they are. Occupation
shapes the life experience of the elderly. As they have been working most of their adult life, about
three to five decades, they have developed accumulated knowledge or tacit knowledge. This tacit
knowledge aids them in decision making. This tacit knowledge led into intuitive and automatic
thinking (Papalia, et al. 2007). Their experience through their occupation will also influence their
openness to innovation. The following variables emerge from the discussion: tacit knowledge and
openness to innovation
The elderly who become entrepreneur grew up in an environment that encourages their
development as entrepreneur. According to Howard Gardner, environment plays an important part in
developing competencies; people tend to develop competencies that their families and culture value
encourage (Papalia, et al. 2007). Entrepreneurship started at young age and has no age limitation. In
the course of time, by facing failures and problems, these elderly consumers become highly creative
individuals. According to Torrance and Simonton, creative individuals are self starters and risk takers.
They are independent, non-conformists, unconventional and flexible, and open to new ideas and
experiences. Entrepreneurs get better as they age. In field of work where mature judgement is needed,
the elderly performs better than younger people. Encapsulation occurs in the elderly consumers,
making their knowledge in the field of expertise easier to add to, access and use. As expert, their
thinking tends to be automatic and intuitive. They do not rely on rules but rather their accumulated
experience or tacit knowledge (Papalia, et al. 2007). From these explanations, there are two things that
can be learned. First, as entrepreneurs there is no need for them to retire as long as they are still
healthy for their ability to work is not negatively affected by their age. Second, their expertise and
tacit knowledge shows their reliance upon experience in making decision.
These elderly consumers migrated to a place bigger than their hometown when they were very young.
This drastic change requires them to be independent and courageous to live in unfamiliar- places,
honing their ability to persevere and overcome obstacles. Ability to persevere and overcome
challenges, event in life that weaken conventional constraint are the factors that contributes to the
development of creativity (Papalia, et al. 2007)
The elderly are highly educated, their parents put emphasize on their education. When there is
no education in their city/village, their parents are willing to let them go to another island by
themselves so that they can go to school. The older group has stronger association with China and
Chinese culture because the culture and the language that the education carried were being instilled in
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them. Therefore as consumers, they are more likely to embrace products and service that resonates
with their culture (Solomon 2013).
As the elderly are getting older, their children are getting married and having children, this
leads to increase in the size of immediate family. According to household life cycle, the elderly
consumers can be categorized into two groups. Full Nest II and Empty Nest II. Full Nest II is the HLC
when the middle aged elderly (35-64) has children who still live in their house and are older than six
years old. This older children creates need for lessons, school, university savings, transportation,
snacks, drinks, toys and many other need related to the children. These needs cause enormous
financial challenges in this stage. Empty Nest II is characterized by married couple over the age of 64
years old whom all the children have left home. They are partially or fully retired. They have ample
free time, healthy, active, and financially well-off. (Hawkins 2010). They spend considerable amount
of money on their children and grandchildren, could be in the form of toys, daily needs, baby supplies
or vacation together. In the case of this research the elderly consumer also pays for their children's
wedding and is involved in the decision making. The discussion shows the importance of age and
household lifecycle as variables.
Among the elderly, health condition could make a significant difference in their life.
According to Gabriel, health is one of the three personal influences (health, marital status and
financial status) that affect how individuals view their life (Burt and Gabbot 1995). According to
Bone, there arc five variables outside of age that essentially segments the elderly; they arc: income,
health, activity level, discretionary time and response to other people (Burt and Gabbot 1995).
Healthy elderly consumers have varieties of leisure, social activities and can opt to never
retire. They also have more discretionary income to spend into leisure, investment, family and their
business. Elderly consumers with good health condition will have younger functional and biological
age compared to their chronological age. This means that they will be able to function, live, like their
younger peers and feel younger, leading to younger perceived age. In this research it is evident that a
mental outlook and activity level has a lot more to do with longevity and quality of life than
chronological age (Solomon 2013). This is why cognitive age, which is defined as how old a person
feels, is a more appropriate yardstick to use. The relevant valuables arc physical condition and
cognitive age
There arc two opposing attitudes regarding retirement, one strongly favors retirement and the
others dread it. Their attitude is determined by their belief about what happens after retirement. If they
see that retirement bring no value to their life, then they will not consider retirement. Those who have
positive view towards retirement value the spare time that retirement provides (Gabriel 1990). View
on retirement will affect choice for retirement, leisure activities and most enjoyable purchase. The
important variables axe belief and attitude towar d retirement
Having understood who they are, understanding what they like and what they do will help to
give clearer picture of their lifestyle. Lifestyle is a pattern of consumption that reflects a person's
choice in spending their money and time. Lifestyle a better indicator compared to demographic in
understanding market (Solomon 2013).
Elderly consumers have broad variety of interests; these interests arc expression of their
unique self. Special interest is also influenced by the elderly consumers' attitude towards retirement
and their retirement status. Those with positive attitude towards retirement have many hobby/leisure
related interests. Elderly consumers with negative attitude towards retirement are single-minded
towards their business. They have none to little interest outside their business-related interests. Status
of retirement also determines special interests.
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Work activih" level
Yes (lugh to Low)
None
• Work-related interest
Attitude
Positive
• Leisure-related inter est
• Leisure-related interest
towards
Retire in ent Negative
• Work related interest
Table 1 Attitude towards retirement and work activity level influence towards interests
The bottom right cell is irrelevant because for entrepreneur who has negative attitude
towards retirement can always opt to never retire. The discussion shows the following important
variables: attitude towards retirement, work activity level, and special interests Aspiration for future is
affected by attitude towards retirement, special interests and values. Health is valued highly among
the elderly, special interests that arc still unfulfilled make up for aspiration for future
Among elderly consumers there are different levels of work activity, varying from full time
work to fully retired. Elderly consumers whom are entrepreneurs axe not influenced by mandatory
retirement; they can choose to never retire. However on the other side, since they own their own
business, their decision to retire is not only determined by willingness, but also their business
condition, whether or not it is possible to continue the business without their active involvement.
Their willingness to retire is influenced by their perception on retirement. If they have negative
perception on retirement, although they can, they will not retire. Instead they might opt for flexible or
less work hour.
Abilitv to Retire
High
Low
High
Full retirement
Work full time
Low
Flexible.'reduc e d
Wort full time
Williugness to
Retire
working hours
Table 2 Retirement matrix
The relevant variables are attitude toward retirement, ability to retire and work activity
According to a Canadian study by Mannel, retirees who are most satisfied with their
retirement are those who are engaged in serious leisure which includes activity that demands skill,
attention, and commitment (Papalia, et al. 2007). Leisure activity is the action that is done in
m tab
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discretionary time. The leisure activities enjoyed by the elderly consumers are not physically
demanding. Types of activities that the elderly consumers enjoy are influenced by their interests,
culture (beliefs, set of values in the society) they grow up in, personality and gender. Variables that
emerge from this discussion arc culture, gender, special interests and leisure activity
Social circle is influenced by personality, age and usage of social media/network. In
personality, there arc extroversion and introversion (Carrigan 1998). As age increases, elderly
consumers become more family focused. The older group of consumers (65+) who are empty nesters,
enjoy and seek to have more of family time compared to the younger ones. (Mannel 1993). As elderly
consumers arc aging, physical limitation increases and extroversion decreases resulting in smaller
social circle and decreases in social activity. Therefore as age increase, closeness with family or
spouse becomes increasingly important for the elderly because they function as social support. The
availability of social platform, increase their social activity and this interaction is more likely to
influence their behavior as consumers. The relevant valuables arc age, social circle, social activity,
personality and usage of social media/network
The elderly consumer's inclination to exercise is influenced by their belief about the benefit
of exercise. If they believe that exercise is essential in maintaining health, then exercise will have
value and they will make time and effort to exercise regularly. The relevant valuables are belief and
sport activity
Most enjoyable ways to spend money correlate with social activities, special interest, and
attitude towards retirement. They arc not afraid of losing their money because they have strong
intrinsic motivation in doing business. This causes them to not despair when they lose money and
therefore better mental health.
Social circle also influences behavior. Consumers who have wide social circles enjoy
spending money for social activities. Elderly consumers with smaller social circle concentrated on
family, place more importance in family. Consequently, they enjoy buying family or household
related product. The valuables arc social activities, special interest and attitude towards retirement
Elderly consumers still carc about their appearances and style. Each of them has certain style
that represents their self concept. However, as they age, preference for clothing is influenced by their
physical condition.
Social circle also influences clothing preference. Elderly consumers who have strong
attachment with their social circle will refer to their group in clothing preferences. The relevant
valuables arc buying intention, social circle and physical condition
Elderly consumers are not amiss from the influence for technology. As it has been explained
before, elderly consumers whom are entrepreneur, have a special trait of an innovator. Innovator
refers to a person who is always on the lookout for novel product or services (Solomon 2013). The
valuable is openness to innovation and buying intention
Elderly consumers from middle upper and lower upper tend to be the person who cares for
their parents. Although in the end, their occupation is irrelevant to their education, importance of good
education may have been imparted from their parents' to the elderly consumer's personal value. All of
their children attained at least bachelor degree and most of them studied abroad. Elderly consumers
reflect their strong and enduring value in product purchase, in this case in education (Lunsford and
Burnett 1992).
Health related consumption doesn't always have something to do with illness. For healthy
elderly consumers, health related consumptions axe more directed toward prevention measures or
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products that help them to cope with physical decline such as nerve pain or simply appearance-related
such as balding. The important variable is physical condition
Motivation for shopping is influenced by their attitude towards shopping and health condition.
Healthy elderly consumers with positive attitude toward shopping will maintain their positive attitude
although it may decline due to shift in their lifestyle.
Mini-Theory
Based on the variables identified in the discussion, linkages to one another can be established.
These linkages will be expressed in a system that results in the proposed mini-theory. A qualitative
research which doesn't result in mini-theory will only be a story of specific phenomena, the theory
allows for the case not just to be descriptive but to have wider meaning (Tharenou, et al. 2007)
Figure 3 Mini Theory
Physical C oaditkm
Aee
CoEQ-rtivs1 Ase
Household Life
Cyde
Social Media
and Nn^orfctna
Sccin L'uzi-e
SociSj Activities
Attitude toward
Retifeman
Special Jntsrest
Work Actmtv
Leisure Actrvitv
Pefioimtv
Buvme InientiotL
- a-:
Abilitv to Retire
. 1J.I OH •:
Spoit Activity
Espaisnce
Tacit
knowledge
Openesi to
Innovation
CONCLUSIONS AND RECOMMENDATIONS
This section contains conclusions from the research, limitations of the research and
recommendations for future research
Conclusions
The past, through culture, education, and upbringing, shaped experiences which in turn
shapes attitudes and belief which will influence their choices. The present, such as household life
cycle, occupation and health affects their buying intention. Household life cycle could predict their
needs and want. Occupation would shape their experience which in turn will affect how they process
information and openness to innovation.
Elderly consumers have wide varieties of activities and interests. They are still actively
working and enjoying life. For the elderly consumers, technology has also become part of the life. It is
used for leisure and social activity. The existence of social media/networking has enabled the elderly
to maintain and widen their social circle.
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Backgrounds, interests and activities influence buying intention. Their behavior as consumer
is shaped by their backgrounds, influenced by their interests through their activities. The elderly
consumers must not be seen and categorized from their chronological age. It is more accurate to
categorize them based on their backgrounds, interests and activities.
Limitations of Research
In this research, all of the respondents arc of Chinese descents. They arc all entrepreneurs
currently living in Surabaya. They are also healthy unlike majority of the elderly. This study doesn't
give complete portrayal of elderly consumers especially of those whom are sick, handicapped,
professionals, and others.
Recommendations for Future Research
In the future there axe still many studies to be done on the elderly consumers. It is
recommended to have more specific or narrower scope of research but uses wider variety of
consumers to be able to compare and contrast the differences among the elderly consumers to develop
new segmentation criteria for the elderly. It is recommended to test the proposed mini-theory through
quantitative research.
REFERENCES
Badan Pusat Statistik. Statistik Penduduk Lanjut Usia Indonesia 2012. Statistic Report, Jakarta: Badan
Pusat Statistik, 2013.
Boyce, Carolyn, and Neale Palena. Conducting In-Depth Interviews: A Guide for Designing and
Conducting In-Depth Interviews for Evaluation Input. Tool Series, Path Finder International,
2006.
Burt, Steve, and Mark Gabbot. "The elderly consumer and non-food purchase behavior." European
Journal of Marketing 29, no. 2 (1995): 43-57.
Carrigan, Marylyn. "Segmenting the grey market: the case for fifty-plus "lifegroups"." Journal of
Marketing Practice: Applied Marketing Science 4, no. 2 (1998): 43-56.
Gabriel, J. Portraits of the over 55s in the United Kingdom. London: McGraw-Hill, 1990.
Hawkins, Del I.& Mothersbaugh, David L. Consumer Behavior: Building Marketing Strategy. New
York: McGraw-Hill, 2010.
Hooley, Graham, Nigel F. Piercy, and Brigitte Nicolaud. Marketing Strategy and Competitive
Positioning. 5th. FT Prentice Hall, 2012.
Ihalauw, John J.O.I. Konstruksi Teori. Jakarta: Kompas Gramedia, 2008.
—. "Metode Penelitian Kualitatif." 2011.
Jonker, Jan, and Bartian Pennink. The Essence of Research Methodology. Heidelberg: Springer, 2010.
Karani, Komal Gyani and Fraccastoro, Katherine A. "Resistance to Brand Switching: The Elderly
Consumer." Journal of Business and Economics Research, December 2010.
Kompas. "Dunia Menua dengan Cepat." Kompas , November 9, 2012: 33.
Kotler, Philip and Kevin Lane Keller. Marketing Management. Harlow, UK: Pearson, 2012.
Leventhal, Richard C. "Aging Consumers and Their Effect on the Marketplace." Journal of Consumer
Marketing 14, no. 4 (1997): 276-281.
Lunsford, Dale A., and Mellissa S. Burnett. "Marketing Product Innovations to the Elderly:
Understanding Barrier to Adoption." The Journal of Consumer Marketing , 1992: 53-62.
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Mannel, R. "High investment activity and life satisfaction: Commitment, serious leisure and flow in
the daily lives of older adults." In Activity and Aging, by J. Kelly. Sage, 1993.
Papalia, E. Diane, Harvey L. Sterns, Ruth D. Fieldman, and Cameron J.Camp. Adult Development and
Aging. McGrawHill, 2007.
Plummer, Joseph T. "The Concept and Application of Lifestyle Segmentation." Jounal of Marketing
38, no. 1 (1974): 33-37.
Schermerhorn, Osborn, Uhl-Biehn, and Hunt. Organizational Behavior. John Wiley & Sons (Asia),
2012.
Sekaran, Uma, and Roger Bougie. Research Method for Business. Wiley, 2013.
Silvers, Gary. "Smashing Old Stereotypes of 50-Plus America." Journal of Consumer Marketing 14,
no. 4 (1997): 303-309.
Solomon, Michael R. Consumer Behavior: Buying, Having and Being. Essex: Pearson Education
Limited, 2013.
Statistics
Indonesia.
2005.
http://www.datastatistikindonesia.com/portal/index.php?option=com_tabel&kat= 1 &idtabel= 116&Itemid= 165:
(accessed Maixh 13, 2014).
Tharenou, Phyllis, Ross Donohue, and Brian Cooper. Management Research Methods. New York:
Cambridge University Press, 2007.
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UNDERSTANDING CHARACTERISTICS OF ELDERLY HIGH END
CUSTOMERS AND THE INFLUENCE TOWARDS BUYING
INTENTIONS
Nadia Vita Hairodin
Business School, Universitas Pelita Harapan
nadiavitahairodin @ gmail.com
John J.O.I. Ihalauw
Business School, Universitas Pelita Harapan
john.ihalauw @ uph.edu
ABSTRACT
The world's population is aging. Elderly consumers (50+) are increasing and becoming
attractive target market. However, in Indonesia, there have not been many research conducted in
studying the elderly. The fact that they are still active, dynamic, able and willing to spend is
overlooked. Seeing this gap, this research is undertaken to understand the current condition of elderly
consumers and how it affects their buying intentions. This qualitative research is guided by several
theoretical foundations and carried out through data triangulation with four key respondents from
high end class with age range of 53 to 71 years old. The result and discussion show that apart from
age and socioeconomic status there are many factors that significantly influence their buying
intention such as, attitude on retirement, household life cycle, health, perceived age, activities and
occupational background. The linkages of all these variables are depicted in the proposed minitheory which summarizes of the research results. In the future, there will be researches that could be
conducted to explore each of the aforementioned propositions with more diverse respondents'
background.
Keyword: elderly consumers, perceived age, activities and occupational background, attitude towards
retirement, health, buying intention
INTRODUCTION
The world's population is aging, including Indonesia. In 2012 there were already 18.55
million citizens aged above 65 years old (7.78 percents of Indonesian population) with the average
life expectancy of 72 years old (Kompas 2012) (Badan Pusat Statistik 2013). In social and health
studies, senior citizens arc defined as those whom are above 65 years old. In marketing, however,
grey market (seniors) are those above 50 year's old (Karani 2010). This means the number of senior
citizens is even bigger. Statistics Indonesia projected that in 2020 grey market will form 20 percents
of total projected population (Statistics Indonesia 2005). Moreover, the over 50s own around threequarters of the world's financial assets and discretionary budget (Hooley et al. 2012).
Other than being active, senior citizens as consumers are actually facing more life changes
than ever before. The research by Roper Starch Worldwide Inc revealed that life of the people in their
50s is far from "settled". Changes in diet, family structure (grandchildren, death, children leaving the
house, children getting married), and career are happening in the 50s more than other life stage
(Silvers 1997). In addition, elderly consumers arc experiencing significant physical and cognitive
decline which affect their needs and wants and behavior as consumers. Therefore, elderly consumers
:
m
m
W r-SS*
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or grey market is not as dull as commonly perceived. They arc dynamic, active, having more needs
than before and many of those needs are unmet by what is being offered in the market.
This present research seeks to understand the current condition of elderly consumers and how
it affects their buying intention so that in the future, company can serve them better. This study
focuses on understanding the distinctive characteristics of elderly consumers within upper-middle to
lower-upper socioeconomic classes and its influences on their buying intention. Three research
problems are:
1. What axe the backgrounds of elderly consumers of the upper-middle and lower-upper socio
economic class?
2. What are the activities and interest of the elderly consumers?
3. How do all the factors above affect buying intention?
THEORITICAL GUIDES
Kotler and Keller define , "Marketing is about identifying and meeting human and socialneeds" (201227). Marketers seek to identify these needs by first, understanding who their customers
are. Customers can be classified into different groups based on key customer market. There arc four
different types of customer market, namely: consumer market, business market, global market, and
non-profit and governmental market. This research focuses on consumer market. To further
understand consumer needs and desire, understanding of consumer behavior is essential.
Consumer behavior is "the study of individuals, groups, or organizations and the process they
use to select, use and dispose of products, services, experiences, or ideas to satisfy the needs and the
impacts that these processes have on the consumer and society/' (Hawkins 2010). Specifically, this
research will focus on buying intention. Intention is the subjective possibility of individuals to do a
certain behavior, in this case buying products or services.
Different groups of consumers with diverse needs and wants lead to market segmentation that
divides market into well-defined slice, consisting of customer with similar" needs and wants. (Kotler
2012). Segmentation reveals important differences that can be acted upon (Plummer 1974). This
research focused on upper middle and lower upper socioeconomic classes and age as its segment to
study.
The upper-middle group consists of successful professional, independent business people and
corporate managers. (Hawkins 2010). Their purchases are directed at projecting successful image.
These individuals tend to be confident and forward looking. They put importance in getting good
education for their children to make sure their children have the same lifestyle.
The lower-upper group is usually working as highly successful professional, entrepreneur
(Hooley, et al. 2012). Many engage in conspicuous consumption by purchasing and using luxurious
products and service to demonstrate great wealth (Hawkins 2010). High status brand and activities are
actively sought by this group.
Age is one of the non-marketing-specific factors within demographic characteristic (Hooley et
al. 2012). Age plays a factor in evolving wants and needs (Leventhal 1997). Consumer behavior is
also influenced by age because it carries culturally defined behavioral and attitudinal norms (Hawkins
2010), different age group will have different approach towards consumption and marketing.
From psychological view, the elderly doesn't only age biologically but also continues to
develop psychologically in the course of their life. Development itself means a systematic process of
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adaptive change in behavior in one or more directions (Papalia, et al. 2007, 4). Most psychologists
today accept the idea that human development goes on throughout life. Baltes (Papalia, et al. 2007)
identified that development is lifelong, depends on history and context, multidimensional, and pliable.
Though not as significant as young adults, the elderly persons still need activities to maintain and
improve their skill.
A person can age in a number of ways and each type of age may not be in sync with one
another (Papalia, et al. 2007). Chronological age is simply a count of how many times an inhabitant
of the planet has orbited the sun. Functional age is a measure of how well a person can function in
physical and social environment as compared to other people with the same chronological age.
Biological age is a measure of how far a person has progressed along potential lifespan; measured by
physical condition. Psychological age depends on how well, in comparison of same-aged peers, a
person can cope with environmental challenges. Social age depends on how closely behavior
conforms to the norms, expectancies, and roles of a person in certain age are expected to play in
society. The elderly should be seen from their chronological age as well as functional, psychological
and biological that in totality shapes cognitive age. Cognitive age refers to one's perceived age, a part
of self concept (Hawkins 2010); it is a more accurate measure for behavior because it affects selfconcept and lifestyle. This imply that consumer with same chronological age may not behave the
same way if they have different cognitive age.
Mature market has the longest segments of life averaging about 29 years (Silvers 1997).
Within these 29 years of life, a lot of life-changing events will occur. Experiencing life-changing
events become one of the prominent characteristics of grey market. Some of the life-changing events
experienced are loss of spouse, survived from major illness, retired from job, major diet change due to
health, loss of mother, adult child move back home, menopause, responsible for parental carc, last
child move out, loss of a father, became a grandparent (Silvers 1997). The turbulence in the life of
grey market customers lead to changes in attitude, outlook of life, behavior and consumer buying
behavior as they reevaluate their wants, needs, goals and role both on personal and consumer levels
(Silvers 1997).
It is a natural process for elderly consumers to experience physiological changes. These
changes will create new needs and benefit sought. In physical appearance, skin tends to be paler and
splotchy; it takes on parchment like texture loses elasticity, hangs in folds and wrinkles. Varicose vein
of the legs arc more common. Hair turns white and thinner, it starts to grow in new places (woman's
chin, man's ear). They may become shorter as disks between spine atrophy. (Papalia, et al. 2007) .
These changes will create new benefit sought in various products.
Not only physical appearance, sensorimotor functioning tends to decline in the late adulthood albeit
with individual variations. Forms of sensorimotor function decline may take form vision, hearing,
taste and smell, touch, pain and temperature, and motor functions (Papalia, et al. 2007)
RESEARCH METHOD
This research employed qualitative method. In qualitative study the goal is the development
of concepts which will help in understanding social phenomena in natural settings, giving emphasis in
the meanings, experiences and views of participants (Ihalauw 2011), (Hooley, et al. 2012)
The research used descriptive case study design that describes the characteristics of persons,
events or situations (Sekaran and Bougie 2013) (Ihalauw 2011). Multiple sources for data
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triangulation is employed in the study, namely in-depth interview, direct observation and the use of
archives and other secondary data.
In-depth interview is conducted to unearth detailed information about a person's thought and
behaviors or want to explore new issues in depth (Boyce and Palena 2006). In this research, the
interviews were conducted in the span of 60-120 minutes. The interviews were done by meeting face
to face. There are four respondents in the age of 50-69 years old. The respondents are from Surabaya
within upper-middle and lower-upper social status.
Verification of data is achieved through convergence of the respondents' answers. Reliability
of this research is achieved through maintaining chain of evidence, by maintaining accurate and
detailed record of the interview transcripts, interview questions and observation, down to the analysis
and conclusion.
According to Tesch (Ihalauw 2011), in qualitative research there is no specific "right way" to
analyze the data. The foundations of qualitative analysis axe data reduction and interpretation. The
abundance of data should be processed into categories, pattern or theme and interpretation using
certain scheme. Therefore, the data analysis will be conducted in the following steps:
•
Extracting the essence of interviews; the researchers read and re-read interview
transcript, write notes as ideas and insights came. Make summary in forms of topics,
and categorize them into important, secondary, unique and irrelevant.
•
Build categories from essence of interviews; using the list of topics, summarize them
using codes, give accurate descriptive formulation.
•
Formulate pattern of answers; these patterns are the explanation for each category
•
Identify and label pattern of answers; important aspects in pattern of answers must be
identified and labeled correctly.
•
Concept formulation; as pattern of answers are being identified and labeled, concept
will emerge. These concepts must be conceptually defined.
•
Formulate propositions; propositions are constructed by logically connecting two
concepts (Ihalauw 2008)
•
Construct a Mini-theory; mini-theory is a theory that is applicable to a particular
situation, it is developed by connecting one proposition with another. (Jonker and
Pennink 2010)
RESULTS AND DISCUSSIONS
This section will present respondent backgrounds, results and discussion of the research. The
following table contains the profile of the four respondents in the interview. It is the descriptive
formulation of the category of answers extracted from the interviews.
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1.
2.
3.
4
XT
^
IName
Year of Birth
Age (2014)
Ctirrent Residence
Hometoun
5. Occupation
Fms
1961
53
Surabaya
Ruteng, East Nusa
Tenggara
Entrepreneur
* Logistic
Business
* Spare part Store
* Heavy
Equipment
Rental
Entrepreneur
* Real Estate
* Shoes Factory
a.
*
b.
«
Spouse
Husband
Daughters (3)
31,29, 18
years old
Franky
1948
66
Surabaya
Balikpapan,
Kalimantan
Entrepreneur
(Retired)
• Cement
Distributor
6. Family Member
a.
*
b.
•
7 Married children
None
• Two out of
three
• One daughter
out of three
None
Positive
Yes
Negative
Yes
Positive
8 Grand children
9 View on
Retirement
RESULTS
Spouse
Wife
Daughters (3)
23,21.14 years
old
Jiau Yin
1957
57
Surabaya
Surabaya
a.
e
h.
•
•
Spouse
Wife
Daughters (3)
Three daughters
38, 36 and 32
years old
Kaisouo
1943
71
Surabaya
Berau,
Kalimantan
Entrep teueur
* Logging
C ompany
* Sandal
Manufacturing
C ompany
• Shoes
Distributor
• Palm Oil
Plantation and
Refinery
a. Spouse
e Wife
h. Daughters (2)
* Two daughters
* 40 and 34
years old
e. Sous (2)
* 38 and 36
years old
• One our of two
daughters
• Two out of
two sons
Yes
Negative
RESULTS
As background characteristics, all key respondents currently live in Surabaya. However, only
one is from Surabaya, the three others came from small cities, Ruteng in East Nusa Tenggara,
Balikpapan and Berau in Kalimantan. All of them moved out from their parents' home since they
were in Junior High School for attaining better education. Since young age, they have been living
independently away from their parents. Those aged 66 and 71 were still able to study in Chinese
school while the younger ones (53 and 57 years old) went to study in Christian/Catholic school.
All respondents' parents were entrepreneurs. The younger key respondents followed the
tracks of their parents' business, whereas the older group opened completely different and bigger
business from their parents. Today, there arc wide ranges of business that these elderly arc involved in
logistic business, spare part store, heavy equipment rental, real estate, shoe factory, cement
distributor, logging company, sandal manufacturing company, shoes distributor, palm oil plantation
and refinery. Their education doesn't contribute to the business they are doing.
All of the elderly are manied with children and some already had grand children. The
younger group of key respondents still has children that depend on them, while the older group's
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children axe all independent of financial support. The younger group still takes care of their parents
and none had serious illness. While in the case of the older group, their parents already passed away.
Amongst the elderly, none of them has serious health problem that interferes with daily
activity, some of those hair problem are mere balding, pinched nerve on the neck and problem with
prostate. None of these health problem hinders their movement.
There are two differing opinion for retirement regardless of age. In this case it is more of a
personal value rather than age factor. Among the younger group there is different view between the
two respondents. While one seeks to be retired in the future to enjoy other things, the other seeks to
never retire until death and to continue working, and even admits that she feels sick when she is not
working.
In the older group the same case is present, while one is already retired; the other seeks to
never retire even at the age of 71 years old. The elderly in favor retirement sees retirement is essential
to good life. The elderly not in favor of retirement, sees retirement as death sentence.
There is wide range of interests amongst the elderly. From the interview results those interests
are opening new business, travelling, going to exhibition (spare part, heavy construction equipment
and new products), hunting for discounted spare part, music concert, off road driving experience,
meeting new people, learning singing, going to plantation and forest (business site).
Many of these special interests arc related to the elderly as entrepreneurs. There is a blurry
line between work and hobby. Their work is their hobby and vice versa. Among the elderly there are
also special interests that arc non-business related such as travelling, music concert, off road driving
experience, meeting new people, and learning to sing.
One of the aspirations in the future for one of the elderly is to enjoy retirement with passive
income. He aspires for business that doesn't need his day to day involvement so that he can have more
free time. The elderly are still actively working to ensure their business is growing. They are devoting
their time and energy in expanding their business. The elderly are also still excited to open new
business. Despite of their age they arc not afraid to start a new business. One respondent said that
without ambition, she is dead.
All of the elderly aspires to be healthy for the long run. This is the reason for their
consumption of supplements/vitamins, exercise, and careful observance of their diet. One elderly
stated that health is number one and that is why he chose to retire.
There arc varieties of leisure activities enjoyed by the elderly, those activities arc watching
TV, listening to music, social activity, shopping, body pampering, spending time with family at home,
watching Youtube, doing sport, learning new things, resting at home and reading books.
The younger group has wider social circle, such as high school friends, spare part enthusiasts,
friends from religious activities, business friends and others that arc not specified. This younger group
has taken the advantage of social network platform such as Facebook, Whatsapp Group, and BBM
Group to re-connect with old friends and to connect with more friends. The older group has more
limited social circle. Consequently the younger group also has more social activities, such as
gathering with friends, reunion with high school friends, religious activities (prayer gathering and
visiting religious places), travelling with friends, and shopping. The older group has considerably less
social activities and spending more time being home especially with family.
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All but one elderly are still actively working everyday with different intensity. There are not
many variety of sport enjoyed by the elderly. The varieties arc, badminton, working out at home, and
swimming.
To describe their behavior as consumers there arc several areas that will be discussed, such as
role as care giver, children's education, most enjoyable consumption, their preference for clothing,
their decision on purchasing clothing, preference for brands, price sensitivity, health related
consumption, aspiration for future, their physical limitation to shop, most convenient place to shop
and motivation to shop.
There arc several ways of spending money that is enjoyed by the elderly. There arc six
categories, namely, business related, hobby, social activities, accessories, investment and
family/household goods.
Business related arc spending that contributes to business growth/purpose. There is no clear
boundary between hobby and business, Therefore hobby-related most enjoyable purchases arc similarto business related purchases. Social activities related purchases arc the purchases done in social
setting or for social purposes. One of the respondents has hobby of collecting bracelet and necklace.
With huge discretionary income due to the success of the business of the respondents some of
them prefer to use their money in investment, such as land, factory building, and real estate. This
investment is done out of personal enjoyment and also generating profit. Family/household- related
most enjoyable purchase means the products that they enjoy purchasing arc those that can be enjoyed
by the family. There is also enjoyment in buying food, being old doesn't always mean forfeiting
enjoyment of food.
All of the respondents arc or were taking role as carcgivcr for their parents. Older respondents
no longer need to support their children financially while the younger respondents still need to support
their children. The youngest respondent (53 year's old) still has all of his children living in the house,
the two older respondent no longer support his children financially because they arc all financially
independent. One respondent has both financially independent and dependent child at the same time.
All of four respondents' children are studying or have studied in university. Three out of four
respondents chose to send their children abroad for education and the reasons are to train their
independence, children's own initiative and security and political issues back in 1998.
Among four respondents, three of them are involved in the purchase of their own clothes,
while one respondent expresses indifference in the purchase of clothing apparels. In buying they
consider fabric material (quality and origin), style, social influence and fit.
The elderly arc well acquainted with technology. Each of the elderly respondents has either
smartphone or tablet device or both. Technology has become part of their lifestyle, social networking,
watching Youtube, or learning to write mandarin on iPad.
Since none of them has serious health problems, none of them has significant medical
expenses. Multiple supplements and vitamins are consumed by three out of four respondents.
Information about multiple supplements is obtained from friends, wife, and recommended by doctors.
The elderly started to consume multiple supplements and vitamins once they reach middle-age and
doesn't stop ever since
With age, there is a great reduce of hair, an elderly claimed that he lost 70% of his hair. To
choose certain hair tonic product, the respondent relies on friends' recommendation, and then try it.
Other than consuming multiple supplements, the elderly are also careful about their diet. They eat
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more moderately, limit the consumption of unhealthy food, and go for healthier choices such as brown
rice, vegetables, fish, oatmeal and fruits. Special pillow is used for the elderly with pinched nerve to
avoid the pain. The elderly also exercise regularly; the younger age group is more irregular- compared
to the older one. The chosen exercises are light exercise and swimming.
None of the elderly profess physical limitation in shopping. Each of them in unanimously
choose mall as the most comfortable place to shop. They are different in their level of motivation to
shop. Some are still passionate about shopping while the others reduced motivation or indifference.
DISCUSSIONS
Based on the above mentioned results and the theoritical guides, this part presents the
discussion of each research problems.
By understanding the elderly consumers' history, current condition, family and opinion, this
study seeks to understand what motivates them and what makes them who they are. Occupation
shapes the life experience of the elderly. As they have been working most of their adult life, about
three to five decades, they have developed accumulated knowledge or tacit knowledge. This tacit
knowledge aids them in decision making. This tacit knowledge led into intuitive and automatic
thinking (Papalia, et al. 2007). Their experience through their occupation will also influence their
openness to innovation. The following variables emerge from the discussion: tacit knowledge and
openness to innovation
The elderly who become entrepreneur grew up in an environment that encourages their
development as entrepreneur. According to Howard Gardner, environment plays an important part in
developing competencies; people tend to develop competencies that their families and culture value
encourage (Papalia, et al. 2007). Entrepreneurship started at young age and has no age limitation. In
the course of time, by facing failures and problems, these elderly consumers become highly creative
individuals. According to Torrance and Simonton, creative individuals are self starters and risk takers.
They are independent, non-conformists, unconventional and flexible, and open to new ideas and
experiences. Entrepreneurs get better as they age. In field of work where mature judgement is needed,
the elderly performs better than younger people. Encapsulation occurs in the elderly consumers,
making their knowledge in the field of expertise easier to add to, access and use. As expert, their
thinking tends to be automatic and intuitive. They do not rely on rules but rather their accumulated
experience or tacit knowledge (Papalia, et al. 2007). From these explanations, there are two things that
can be learned. First, as entrepreneurs there is no need for them to retire as long as they are still
healthy for their ability to work is not negatively affected by their age. Second, their expertise and
tacit knowledge shows their reliance upon experience in making decision.
These elderly consumers migrated to a place bigger than their hometown when they were very young.
This drastic change requires them to be independent and courageous to live in unfamiliar- places,
honing their ability to persevere and overcome obstacles. Ability to persevere and overcome
challenges, event in life that weaken conventional constraint are the factors that contributes to the
development of creativity (Papalia, et al. 2007)
The elderly are highly educated, their parents put emphasize on their education. When there is
no education in their city/village, their parents are willing to let them go to another island by
themselves so that they can go to school. The older group has stronger association with China and
Chinese culture because the culture and the language that the education carried were being instilled in
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them. Therefore as consumers, they are more likely to embrace products and service that resonates
with their culture (Solomon 2013).
As the elderly are getting older, their children are getting married and having children, this
leads to increase in the size of immediate family. According to household life cycle, the elderly
consumers can be categorized into two groups. Full Nest II and Empty Nest II. Full Nest II is the HLC
when the middle aged elderly (35-64) has children who still live in their house and are older than six
years old. This older children creates need for lessons, school, university savings, transportation,
snacks, drinks, toys and many other need related to the children. These needs cause enormous
financial challenges in this stage. Empty Nest II is characterized by married couple over the age of 64
years old whom all the children have left home. They are partially or fully retired. They have ample
free time, healthy, active, and financially well-off. (Hawkins 2010). They spend considerable amount
of money on their children and grandchildren, could be in the form of toys, daily needs, baby supplies
or vacation together. In the case of this research the elderly consumer also pays for their children's
wedding and is involved in the decision making. The discussion shows the importance of age and
household lifecycle as variables.
Among the elderly, health condition could make a significant difference in their life.
According to Gabriel, health is one of the three personal influences (health, marital status and
financial status) that affect how individuals view their life (Burt and Gabbot 1995). According to
Bone, there arc five variables outside of age that essentially segments the elderly; they arc: income,
health, activity level, discretionary time and response to other people (Burt and Gabbot 1995).
Healthy elderly consumers have varieties of leisure, social activities and can opt to never
retire. They also have more discretionary income to spend into leisure, investment, family and their
business. Elderly consumers with good health condition will have younger functional and biological
age compared to their chronological age. This means that they will be able to function, live, like their
younger peers and feel younger, leading to younger perceived age. In this research it is evident that a
mental outlook and activity level has a lot more to do with longevity and quality of life than
chronological age (Solomon 2013). This is why cognitive age, which is defined as how old a person
feels, is a more appropriate yardstick to use. The relevant valuables arc physical condition and
cognitive age
There arc two opposing attitudes regarding retirement, one strongly favors retirement and the
others dread it. Their attitude is determined by their belief about what happens after retirement. If they
see that retirement bring no value to their life, then they will not consider retirement. Those who have
positive view towards retirement value the spare time that retirement provides (Gabriel 1990). View
on retirement will affect choice for retirement, leisure activities and most enjoyable purchase. The
important variables axe belief and attitude towar d retirement
Having understood who they are, understanding what they like and what they do will help to
give clearer picture of their lifestyle. Lifestyle is a pattern of consumption that reflects a person's
choice in spending their money and time. Lifestyle a better indicator compared to demographic in
understanding market (Solomon 2013).
Elderly consumers have broad variety of interests; these interests arc expression of their
unique self. Special interest is also influenced by the elderly consumers' attitude towards retirement
and their retirement status. Those with positive attitude towards retirement have many hobby/leisure
related interests. Elderly consumers with negative attitude towards retirement are single-minded
towards their business. They have none to little interest outside their business-related interests. Status
of retirement also determines special interests.
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Work activih" level
Yes (lugh to Low)
None
• Work-related interest
Attitude
Positive
• Leisure-related inter est
• Leisure-related interest
towards
Retire in ent Negative
• Work related interest
Table 1 Attitude towards retirement and work activity level influence towards interests
The bottom right cell is irrelevant because for entrepreneur who has negative attitude
towards retirement can always opt to never retire. The discussion shows the following important
variables: attitude towards retirement, work activity level, and special interests Aspiration for future is
affected by attitude towards retirement, special interests and values. Health is valued highly among
the elderly, special interests that arc still unfulfilled make up for aspiration for future
Among elderly consumers there are different levels of work activity, varying from full time
work to fully retired. Elderly consumers whom are entrepreneurs axe not influenced by mandatory
retirement; they can choose to never retire. However on the other side, since they own their own
business, their decision to retire is not only determined by willingness, but also their business
condition, whether or not it is possible to continue the business without their active involvement.
Their willingness to retire is influenced by their perception on retirement. If they have negative
perception on retirement, although they can, they will not retire. Instead they might opt for flexible or
less work hour.
Abilitv to Retire
High
Low
High
Full retirement
Work full time
Low
Flexible.'reduc e d
Wort full time
Williugness to
Retire
working hours
Table 2 Retirement matrix
The relevant variables are attitude toward retirement, ability to retire and work activity
According to a Canadian study by Mannel, retirees who are most satisfied with their
retirement are those who are engaged in serious leisure which includes activity that demands skill,
attention, and commitment (Papalia, et al. 2007). Leisure activity is the action that is done in
m tab
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discretionary time. The leisure activities enjoyed by the elderly consumers are not physically
demanding. Types of activities that the elderly consumers enjoy are influenced by their interests,
culture (beliefs, set of values in the society) they grow up in, personality and gender. Variables that
emerge from this discussion arc culture, gender, special interests and leisure activity
Social circle is influenced by personality, age and usage of social media/network. In
personality, there arc extroversion and introversion (Carrigan 1998). As age increases, elderly
consumers become more family focused. The older group of consumers (65+) who are empty nesters,
enjoy and seek to have more of family time compared to the younger ones. (Mannel 1993). As elderly
consumers arc aging, physical limitation increases and extroversion decreases resulting in smaller
social circle and decreases in social activity. Therefore as age increase, closeness with family or
spouse becomes increasingly important for the elderly because they function as social support. The
availability of social platform, increase their social activity and this interaction is more likely to
influence their behavior as consumers. The relevant valuables arc age, social circle, social activity,
personality and usage of social media/network
The elderly consumer's inclination to exercise is influenced by their belief about the benefit
of exercise. If they believe that exercise is essential in maintaining health, then exercise will have
value and they will make time and effort to exercise regularly. The relevant valuables are belief and
sport activity
Most enjoyable ways to spend money correlate with social activities, special interest, and
attitude towards retirement. They arc not afraid of losing their money because they have strong
intrinsic motivation in doing business. This causes them to not despair when they lose money and
therefore better mental health.
Social circle also influences behavior. Consumers who have wide social circles enjoy
spending money for social activities. Elderly consumers with smaller social circle concentrated on
family, place more importance in family. Consequently, they enjoy buying family or household
related product. The valuables arc social activities, special interest and attitude towards retirement
Elderly consumers still carc about their appearances and style. Each of them has certain style
that represents their self concept. However, as they age, preference for clothing is influenced by their
physical condition.
Social circle also influences clothing preference. Elderly consumers who have strong
attachment with their social circle will refer to their group in clothing preferences. The relevant
valuables arc buying intention, social circle and physical condition
Elderly consumers are not amiss from the influence for technology. As it has been explained
before, elderly consumers whom are entrepreneur, have a special trait of an innovator. Innovator
refers to a person who is always on the lookout for novel product or services (Solomon 2013). The
valuable is openness to innovation and buying intention
Elderly consumers from middle upper and lower upper tend to be the person who cares for
their parents. Although in the end, their occupation is irrelevant to their education, importance of good
education may have been imparted from their parents' to the elderly consumer's personal value. All of
their children attained at least bachelor degree and most of them studied abroad. Elderly consumers
reflect their strong and enduring value in product purchase, in this case in education (Lunsford and
Burnett 1992).
Health related consumption doesn't always have something to do with illness. For healthy
elderly consumers, health related consumptions axe more directed toward prevention measures or
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products that help them to cope with physical decline such as nerve pain or simply appearance-related
such as balding. The important variable is physical condition
Motivation for shopping is influenced by their attitude towards shopping and health condition.
Healthy elderly consumers with positive attitude toward shopping will maintain their positive attitude
although it may decline due to shift in their lifestyle.
Mini-Theory
Based on the variables identified in the discussion, linkages to one another can be established.
These linkages will be expressed in a system that results in the proposed mini-theory. A qualitative
research which doesn't result in mini-theory will only be a story of specific phenomena, the theory
allows for the case not just to be descriptive but to have wider meaning (Tharenou, et al. 2007)
Figure 3 Mini Theory
Physical C oaditkm
Aee
CoEQ-rtivs1 Ase
Household Life
Cyde
Social Media
and Nn^orfctna
Sccin L'uzi-e
SociSj Activities
Attitude toward
Retifeman
Special Jntsrest
Work Actmtv
Leisure Actrvitv
Pefioimtv
Buvme InientiotL
- a-:
Abilitv to Retire
. 1J.I OH •:
Spoit Activity
Espaisnce
Tacit
knowledge
Openesi to
Innovation
CONCLUSIONS AND RECOMMENDATIONS
This section contains conclusions from the research, limitations of the research and
recommendations for future research
Conclusions
The past, through culture, education, and upbringing, shaped experiences which in turn
shapes attitudes and belief which will influence their choices. The present, such as household life
cycle, occupation and health affects their buying intention. Household life cycle could predict their
needs and want. Occupation would shape their experience which in turn will affect how they process
information and openness to innovation.
Elderly consumers have wide varieties of activities and interests. They are still actively
working and enjoying life. For the elderly consumers, technology has also become part of the life. It is
used for leisure and social activity. The existence of social media/networking has enabled the elderly
to maintain and widen their social circle.
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Backgrounds, interests and activities influence buying intention. Their behavior as consumer
is shaped by their backgrounds, influenced by their interests through their activities. The elderly
consumers must not be seen and categorized from their chronological age. It is more accurate to
categorize them based on their backgrounds, interests and activities.
Limitations of Research
In this research, all of the respondents arc of Chinese descents. They arc all entrepreneurs
currently living in Surabaya. They are also healthy unlike majority of the elderly. This study doesn't
give complete portrayal of elderly consumers especially of those whom are sick, handicapped,
professionals, and others.
Recommendations for Future Research
In the future there axe still many studies to be done on the elderly consumers. It is
recommended to have more specific or narrower scope of research but uses wider variety of
consumers to be able to compare and contrast the differences among the elderly consumers to develop
new segmentation criteria for the elderly. It is recommended to test the proposed mini-theory through
quantitative research.
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