Marketing innovations to old-age consumers: A dynamic Bass model for different life stages

Matthias Pannhorst and Florian Dost

Technological Forecasting and Social Change, 2019, vol. 140, issue C, 315-327

Abstract: To identify context-dependent opportunities to market innovations to the elderly, this study empirically analyzes the most prevalent pathways through advanced age, demonstrating which circumstances in the old-age life course provide the strongest potential for specific targeting strategies. First, using a latent Markov model and longitudinal survey data spanning 15 years, we produce a dynamic life course model with transitions over time. Second, we link a modified Bass diffusion model — using both static and dynamic parameters — to our model, augmenting it with a second cross-sectional consumer behavior data set. The results show comparatively strong consumption spending, high media interaction, but diminishing social inclusion in old age, though all factors exhibit heterogeneity among old-age clusters. Employing dynamic diffusion models, we find that a static view of the elderly market that ignores life course transitions generally overestimates their spending power. Forecasts of cluster-specific adoption dynamics draw a differentiated picture of individual clusters' attractiveness. Our analysis underscores the influence of life events on individual behavior and shows that a dynamic view of elderly markets yields a more nuanced and accurate assessment of their potential and attractiveness. It also confirms that social status and income strongly affect consumer behavior and spending, though we identify several exceptions.

Keywords: Innovation; Diffusion model; Targeting; Aging; Consumer lifetime value; Longitudinal model (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:140:y:2019:i:c:p:315-327

DOI: 10.1016/j.techfore.2018.12.022

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