Examination of Witnesses (Questions 457
- 459)
TUESDAY 8 MARCH 2005
8 MARCH 2005Mr Mervyn
Kohler, Mr Steven Sadler and Mr Robert Diamond
Q457 Chairman:
May I welcome you very warmly and thank you for giving us time
and coming along to our question session this morning. Thank you
also for the written evidence that your organisations have submitted;
that has been very helpful and has been digested, and it is the
basis of some of the discussion this morning. Can I point out
to you that we are now being broadcast live on internet, so anything
you say will not simply be taken down and used in evidence, but
it is available to anyone watching this on internet. Equally,
the discussion may be broadcast on the Parliamentary digital channel,
and the microphones are quite sensitive. That being said, my colleagues
all have name tags and I will not go around the table taking time
to introduce them, they will introduce themselves as they ask
questions. I would like to start with a fairly general question,
but one that I think is central to the issues that we would like
to talk about this morning; perhaps each of you might, in responding
to this question if you want to, simply say who you are and which
organisation you represent. The question I want to ask is the
belief that we largely have, and it is reinforced in the media,
that the older generation has very significant economic power
now that perhaps it did not have in the previous decades. That
being so, we have found—and this is one of the reasons for
this session today—that there seems to be surprisingly little
movement towards developing products specifically designed for
this group of potential customers. You may or may not agree with
that, but I would like you to reflect on it and say, if it is
the case, why you think that is, and if it is not the case perhaps
give us some of the evidence to the contrary. Mervyn Kohler, would
you like to start?
Mr Kohler: Yes, thank
you My Lord Chairman, I am Mervyn Kohler, the Head of Public Affairs
at Help the Aged. The picture of a wealthier older society than
we have ever seen before is a little bit unfair and it is certainly
over-simplistic. Undoubtedly, the top 10 per cent—the top
quintile perhaps—of our older population have got pretty
high incomes. They have come from a background of reasonably good
pension schemes—which actually delivered—and they
have managed to build up a fair amount of capital savings, but
for the other four-fifths we are looking at pretty staggering
levels of subsistence. Barely half of our older population actually
have an income large enough in order to pay income tax. We have
got something like five million—again about half of our
older population—now eligible for means-tested benefits
of one kind or another, and those of course are only designed
to provide people with subsistence income; ergo, quite a lot of
our older population still remains, sadly, poor.
Q458 Chairman: For the others, is
there an unwillingness amongst manufacturers or industries to
look for products that would be welcome to them in marketing?
Mr Kohler: Yes, in general terms—and
this is certainly what I would like to say to the Committee today—whilst
there are a number of manufacturers and producers who obviously
do market specifically to the older purchasers and therefore do
a fair amount of market research there, in the general run of
the provision of normal, everyday goods and services, the special
needs of the older population tend to get overlooked, there is
a trade-off with other age groups who are seen to be more accessible
or interesting and so on and so forth. Take the ever diminishing
size of mobile phones as an obvious example, there is huge consumer
demand for small keyboards whereas the older population are struggling
around trying to find out where the numbers are and that type
of thing.
Mr Diamond: Robert Diamond, I am the
founder and chief executive of Diametric, which is a marketing
agency. We provide services to the large, national brand owners
to help them in the effectiveness of their marketing, and three
years ago we launched a unit of the company called Grey Matters
to help mainstream brands understand and respond to the challenges
of an ageing population. Our proposition is overtly commercial,
we work on subjects that are of interest to mainstream brand owners,
and I will be honest and say that our Grey Matters unit has struggled
somewhat over the last three years to engage the large advertisers
in the UK in a meaningful dialogue about the impact of an ageing
population. The reasons for that are manifold, but I will focus
on three specifically. The first is a genuine challenge around
the idea of marketing to older people—when we talk about
a mature audience we typically refer to over 45 or over 50, it
is an arbitrary measure and I apologise in advance for that.
Q459 Chairman: Very arbitrary I would
have said.
Mr Diamond: Fundamentally, there is a
growing challenge that a distinct 50-plus mindset exists any longer,
and there is some research that we presented prior to this meeting,
recent research done by MORI, that shows that 88 per cent of 60-64
year olds said that the term "elderly" did not apply
to them; 52 per cent of 75-80 year olds said the term did not
apply to them. One reason, therefore, is that there is a genuine
challenge about a distinct 50-plus mindset. The second reason
is that if one thinks about the large advertisers and the marketers
in the UK, they are often applying it to a heartland of rather
stereotypically large families with children, and there is a genuine
concern, I think, that by marketing their car or their computer
or their food product overtly to an older audience, it has the
potential to alienate the mainstream, and there is some evidence
that that is taking place. The third reason I would point to is
that marketing and marketers, it is a youth sport I am afraid;
at 37 I am one of the old guard, which is rather disturbing, and
again we have presented some evidence from the Institute of Practitioners
of Advertising that suggested that 39 per cent of UK marketing
directors are aged under 35 and only 10 per cent of marketing
directors—these are the people who are spending the budgets—are
aged over 50. Again, that leads to an environment which perpetuates
and rewards youth and is rather cynical and critical of anyone
over 35.
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