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

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>1/03/2019
<mark>Journal</mark>Technological Forecasting and Social Change
Volume140
Number of pages13
Pages (from-to)315-327
Publication statusPublished
Early online date15/01/19
Original languageEnglish

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.