Study Report : Changing Patterns of Income & Expenditure of Older People in India: An Assessment - April 2018
An
Assessment
April
2018
NATIONAL
Study conducted
Under
RESEARCH & ADVOCACY CENTRE
(For
Needs & Rights of Older people)
Agewell Foundation
(In
Special Consultative Status with the
ECOSOC at United Nations since 2011)
-Associated
NGO Status with UN-DPI-
M-8A, Lajpat Nagar-II,
New Delhi-110024, India
+9111-29836486, 29840484
agewellfoundation@gmail.com
I. Introduction
In
today's market oriented world, everyone's life is affected by never ending
possibilities in the market and each one of us is a consumer. India is one of
the fast growing economies and with rapid globalization, liberalization and
privatization of Indian economy; India is already world's 6th
largest economy in 2018.
Till
few years back, Indian market was focused on younger people and older persons
had never been considered as primary consumers due to their negligible presence
in national population as well as traditional and socio-economic scenario. With ever growing population of old people
particularly because of increasing life expectancy of older persons in India,
the market scenario has also started changing. Currently India is 2nd
largest populous country of the world.
India has second largest elderly population i.e. 130+ million older
persons (60+) and by the year 2021 approx. 11% population of the country will be 60+.
According
to data from the Sample Registration System (SRS), life expectancy at the age
of 60 has increased from 14 years in 1970–1975 to 18 years in 2010–2014 with
women living about two years longer than men.
Owing to the change in financial status and improved
independence of older persons, particularly belonging to middle, upper middle
and upper classes, their role in financial activities has also undergone
significant change. Today, they can be observed to be active buyers as well as consumers
of various products and services and embarking on other financial activities.
II. Overview
Consumption
is frequently used for measuring economic wellbeing of older persons. In India
people generally tend to accumulate assets when income is high and use these
assets when their income declines. That’s why, older and younger generations
save less than middle-age individuals do. Thus, savings are mostly accumulated
during working life and used for financing consumption and maintaining the health
and standard of living in old age.
Older
persons constitute an important and growing consumer group. Their share is
rising very sharply as they have considerable purchasing power, and they tend
to use up accumulated savings in old age.
Older
persons, who have earned money with their hard work and efforts and have
self-acquired net-worth or inherited wealth, value of money is important for
most old people. With sound financial status, they believe that consumer is the
king and tend to seek good value for their money. It has also been observed
that financially well-settled older persons prefer to utilize their purchasing
power for better quality of life in old age.
Older
persons have considerable purchasing power, which is backed up by the family
support that their respective younger family members provide to them.
Government has also undertaken efforts to enhance the economic well-being of
older persons. Government schemes have implemented significant parametric
reforms for social security and healthcare with increased pension amount, tax
concessions, discounts and benefits specifically for older population.
Oder people have higher net-worth
value in comparison to other age group consumers, as
· They
have earned money throughout their life
· They
have inherited properties in their name
· They
have well-settled children who support them financially as well
· They
have varied needs & requirements in old age
· Their
consumption is higher than other age groups
· Most
of them head their respective families
Opportunities in Market Segments of
products & services, primarily used by older persons
In
India, the market for products & services, primarily used by older persons
is still largely underdeveloped in terms of both product and service offerings
compared to other developed countries.
Elderly
Care Products & Services
Medicines
India is
among the top six global pharmaceutical producers in the world Drug consumption
by the 60+ age group is typically two or three times higher than that of any
other age group. Older persons are big consumers of the medicines/treatment for
these diseases;
· Hypertension
· Cerebrovascular
Disease
· Diabetes
· Chronic
Obstructive Pulmonary Disease (COPD)
· Rheumatoid
Arthritis
· Ischemic
Heart Disease
· Gastroenteritis
Intervertebral Disc Disorders
· Cholelith
and Cholecystitis
· Cataract
·
Respiratory Diseases
·
Cancer
· Alzheimer’s Disease
· Arthritis
·
Osteoporosis
· Depression
· Oral Health
Mobility & Impairments
India
currently has nearly 130 million old people and almost 2/3rd are
impaired – mobility, visual, hearing. This section of elderly largely depends
on mobility aid products, hearing and visual auxiliary equipment and
rehabilitation. A rapidly ageing population, especially the increasing 80+ age
group, will drive demand for elderly care products/services, rehabilitation
centres and nursing facilities.
Impairment
· Walking
· Vision
· Hearing
Products
and services (for elderly consumers)
Products
· Wheelchairs
· Walkers
· Walking
sticks
· Adult
Diapers
· Hearing
aid
· Specs
/ contact lenses
· Crutches
· Dentures
· Other
accessories
Services
· Medical – Dental, Eye, Diabetes ,Blood pressure,
Pathological, Thyroid Test, Body scan, Arthritis, Osteoporosis, Cancer, Joints
Pain, Paralysis, Hypertension, nutrition, Counseling
· Financial
– Counseling, Financial literacy, Investments, Pension, Insurance, Medical
Insurance, Reverse Mortgage
· Legal
– counseling, Will-making, legal, property related issues,
· Social
– Counseling, social interaction, interpersonal, socio-cultural , pilgrimage,
Travelling
· Old
age Care – Housekeeping, Care giving, Daycare homes, Recreational, digital
literacy
· Psychological
– counseling, referral,
· Others
– religious, political
Nutritious food items
· Vitamins/Proteins/Calcium
· Health
supplements
· Anti-ageing
products
Comfort products
· Special
Chairs/tables
· Footrests
· Exerciser
· Bathroom
aid
Old
Age Care
Services and Housing
Changing
family structures due to popularity of nuclear family system and rapid
urbanization trends, large number of Indian elderly population is living alone
and the trend is increasing day-by-day. The traditional family home care
approach for the elderly is being challenged, creating a void to be filled by
the government / non-government / private sector.
This
has emerged huge demand of old age care homes, caregivers, nursing homes. Today
there are 1000+ old age homes in India, but these cater to just about 1%
elderly who are in search of old age homes across the country.
In
India majority of elderly living alone opt for home-based elderly care and many
Indian elderly are often not aware of the availability of many at home or
residential-based care, rehabilitation and counseling services.
In
view of fast changing family system, there is huge demand of old age services
in India.
Health Foods & Nutritional
Supplements
India
is seeing a rapidly growing number of diet-related chronic diseases such as
high blood pressure, diabetes and obesity. Indian elderly consumers are becoming
more health conscious. Despite an aspiration for maintaining healthier eating
habits as a top aim, they are turning to self-medication such as health
supplements; vitamins and minerals to strengthen their immune systems and boost
their energy levels.
The
majority of them are willing to pay higher premiums for food products deemed to
be healthier and more active.
Digital Technology
With
growing interest in digital technology among older persons, due to increasing
affordability, greater user-friendliness and various convenient apps for socializing
or entertainment, smart phones are gaining popularity in elderly community.
Increasing social mobility and urbanization is stimulating demand for
innovative gadgets, which can help alleviate fears of loneliness and isolation.
In addition, older consumers are increasingly pursuing digital health devices
such as blood pressure monitoring, wearable medical alert systems and various
electronic aids to assist with daily living.
Personal Care products
Modern
day Indian elderly are also conscious towards their appearance and body. They take interest in style, relevant fashion
and better services, as they have a strong desire to enjoy their social lives
more, regardless of their age.
Travel, Leisure & Entertainment
Elderly
consumers who have more money in their pockets and leisure time, like to travel
more often to improve their social and health wellbeing, socializing and
relaxation. Elderly consumers prefer to travel with companions, either in small
groups of families, and with former colleagues or friends. They commonly
indicate that price is less important than who they are travelling with and the
destination.
Higher
incomes and rapid urbanization are generating a growing demand for leisure and
entertainment in India. Apart from the
travel industry, India’s entertainment industry has all experienced tremendous
growth in recent years. Older Indians are looking for a more sophisticated
lifestyle with greater personal enjoyment and leisure time.
With
fast increasing population of elderly, it’s a good sign for travel and tourism
industry in India.
Financial Services & Products
This
growing elderly consumer segment is not only opening up potentially lucrative
business opportunities for manufacturers and service providers, but also for
the financial services industry – where India, unlike most developed nations,
has previously not focused on. With decent personal savings in hand but lack of
investment options, they have turned to participate in various types of
investments, such as FDs of banks. Elderly with high net-worth value are
enthusiastic and relatively savvy investors, but they are left largely to rely
on their own or younger family members' expertise when engaging in financial
trading due to a lack of financial consultancy services and investment products
to aid their decision making.
High savings habits of middle class
older persons
Older
persons in India, particularly middle class have strong tendencies to save, as
average retirement pension remains low.
Traditional
family support network is breaking down due to Urbanization and economic
development accelerated, along with the influence of the nuclear family system;
it has become increasingly difficult for younger family members to perform
their perceived duty to look after their elderly family members. Senior
citizens are becoming more economically independent; they do not want to be a
financial burden on their families, so planning for their future financial
situation is becoming essential.
Retirement benefits
The
financial services sector has huge potential, providing products and services
for the 130 million older people of India. The government has put continuous
effort into reforming the pension system, including encouraging pension funds
to invest in capital markets, pushing to expand their investment scope,
diversify risk and improve returns.
Insurance
With
rapidly ageing population and increased life expectancy, social security system
is struggling to cope with the large number of retired older persons who demand
long-term pension payouts and quality health care in the coming decades.
Private insurers, both domestic and foreign, are expected to play a bigger role
in providing protection for senior citizens, ranging from life and pension
insurance to healthcare and long-term care insurance.
Wealth Management
In
India, majority of older people prefer to invest their savings and earnings in
Banks' various saving schemes. However, with rising net-worth value and annual
income they are now looking new options to invest their financial resources.
Currently real estate, stock market, mutual funds and gold schemes are some of
the favorite investment options.
III. Aims & Objectives of the Study
Over the years, overall financial status of older
people has improved, primarily due to fast changing socio-economic conditions,
ongoing open market policies, liberalization of economy and host of other
factors. The main objective of this research endeavour is to assess the status
of older persons as consumers through an in-depth qualitative study. Aims and
specific objectives of the study are as under;
· To
assess the financial status of the older persons.
· To
assess the net-worth value of older persons
· To
assess the increasing purchasing power of older people
· To
assess the needs & requirements of older persons
· To
assess the contribution of older persons in their families' overall consumption
· To
assess the role of older persons as buyer, negotiator, influencer, payer and
actual user
· To
assess the expenditure pattern of older persons
· To
enlist opinions and views regarding the protection of consumer interests of
older persons
· To
assess the growing markets of products and services useful for older persons
IV. Scope & Methodology
This study is an
attempt to understand status of older persons as consumer in view of current
market scenario. It has been endeavored to explore the emerging role of elderly
consumers in business and economy.
Sampling
Frame
A list of older persons who were willing to be part
of the study was first prepared. As the literature review suggests the older
people are faced with diverse issues, problems and challenges ranging from
frailty to functional inadequacies; physical & health problems; social
isolation & loneliness; neglect, economic insecurity etc. Therefore, while
developing this list of respondents or the sampling frame the representation of
this diversity was kept in mind so that vast variety of challenges,
particularly financial issues that older people face are culled out from this
research.
Sampling
Method, Sample Size & Duration
The respondents who
comprised the sample for the study were selected on the basis of random sampling made on the basis of
gender , community (rural-urban), age-group etc.
Sample
Size: A total of 10000 respondents were studied by 400 volunteers across all the five
regions of Northern, Southern, Western, Eastern and Central India. The survey
was conducted during the month of March
- April 2018.
Respondents
included 4899 rural and 5101 urban elderly. As for as gender wise composition
of the sample is concerned, out of 10000 total respondents, 4762 respondents
were older men and 5238 older women. However, the number of older women
respondents was comparatively higher as is depicted in the diagram.
Tools and techniques for data
collection
Main emphasis was on
qualitative information therefore, a more
intuitive Approach was adopted for the research so as to arrive at an understanding of the issue to cull out a sample.
The information was enriched with the help of focused group discussions and in-depth interviews.
· Out
of 10000 elderly interviewed during the survey, 5653 respondents (56.5%) were
found to be in the age group of 60-70 years,
3120 respondents (31.2%) were
between 71-80 years and the remaining 1227 (12.3%) respondents comprised the
oldest old group (81+ years).
·
Elderly respondents were divided into 4
categories on the bases of gender and community of the respondents. Each of the
category, rural older men (23.54%), rural older women (25.45%), urban older men
(24.08%) and urban older women (26.93%) consisted of nearly one fourth of the
total respondents.
VI. Major Findings
Primary
Source of Income of Older Persons
· During the survey, 30.1%
elderly respondents said that their primary source of income was their monthly
pension. Out of 10000 elderly respondents, 3014 respondents said that their main
source of income is pension.
· Among sample
respondents, 19.4% respondents claimed that their main source of income is
money earned in form of rental from their land / house properties, interest on
investments, dividends, etc.
· As per 20.19%
respondents, their main source of income in old is their jobs or other gainful
engagements. 2019 elderly people said that they are engaged in at least one
gainful job/occupation, even after retirement.
· Approx. 1/10th
elderly respondents reportedly claimed that they earn their major part of
monthly income from their respective business/professions. Out of a total 10000
respondents, 1052 claimed this.
· Further 11.5% elderly
respondents said that they depend on their govt. sponsored old age pension
scheme, which is their primary source of income in old age.
· During the interview
with sample elderly respondents it was also found that 8.2% elderly people have
no or marginal income in old age. They are totally dependent of others for
their day-to-day needs and requirements.
Major source of Income area-wise
· On analyzing the
feedback collected from older persons, it was found that among rural elderly
33.6% and among urban elderly 26.8% were receiving major part of their income
from pension while 13.23% rural elderly and 25.3% urban elderly were getting
income from rent/interest/etc.
· In urban areas 20.9%
respondents claimed that they earn from their jobs or other gainful occupation,
while in rural areas only 19.5% elderly said they their major part of income
comes from their jobs/occupation.
· Further in urban areas
17% and in rural areas 3.8% elderly people said that they are earn substantial
income from their respective business or professions.
· In rural areas almost
every 6th elderly person (16%) gets old age pension, which is
his/her primary source of income. In
urban areas percentage of elderly in this category is 7.2 only.
· During the survey it was
also found that in rural areas 14% older persons has no or negligible income in
old age, while in urban areas there are approx. 3% people who have no/marginal
income.
Major source of Income Gender-wise
· When data pertaining to
income of older persons, further analyzed gender-wise, it was found that for 28%
elderly women pension/family pension was the major source of income in
comparison to 33% elderly men.
· For 21% elderly men
jobs/gainful engagements were major source of income, while 19% elderly women
were earning major part of their income from their jobs. 14% elderly men in
comparison to 8% elderly women were found receiving their primary income from
business/professions.
· While 14% elderly women
and 2% elderly men claimed that their income is nil / negligible in terms of
money.
Monthly income of older persons
· 14.85% respondents reportedly
claimed that they earn Rs. 25000 and above every month, while 12.7% elderly
respondents said that their monthly income is above Rs. 20000 but below Rs.
25000.
· 18.45% elderly
respondents were found in lower-middle income group i.e. Rs. 10000/- to Rs.
15000/- bracket, while 13.95% elderly respondents were found in middle income
group i.e. Rs. 15000-20000.
· Every 5th
elderly were found in the lower monthly income group of Rs. 5000-Rs. 10000. Out
of 10000 elderly respondents, 2030 elderly said that their monthly income is
between Rs. 5000 and Rs. 10000/.
· 19.75% elderly respondent
claimed that their monthly income is nothing or negligible.
· On analysis of data area-wise it was found that 22.17% urban
elderly respondents above 60 years of age, were earning more than Rs. 25000 per
month, while only 7.23% rural elderly respondents were earning Rs. 25000 and
above per month.
· 15.35% urban and 9.9%
rural elderly claimed that their monthly income is between Rs. 20000 & Rs. 25000, while 14.6% urban and
13.3% rural elderly said that they earn Rs. 20000-Rs. 25000 per month.
· In rural areas 69.5%
elderly respondents in comparison to 47.9% urban elderly respondents were found
earning monthly income of Rs. 15000 and below.
· Every 4th
rural elderly and 7th urban elderly claimed that they have no source
of monthly income.
· Gender wise analysis of
data shows that every 5th older men and every 10th older
women have monthly income of Rs. 25000 & above.
· Approx. 35% older men claimed
that their monthly income is something between Rs. 15000 and Rs. 25000, while
19% older women were found in this group.
· Approx.1/3rd
elderly men reportedly were earning monthly income of Rs. 5000 to Rs. 15000,
while approx. 45% elderly women said that their monthly income is between Rs.
5000 to Rs. 15000.
· Every 8th and
4th elderly men and elderly women respectively were found with no or
negligible monthly income during the survey
Net-worth value of older persons
· Out of total 10000
elderly respondents interviewed by volunteers during the survey, 65.5%
respondents claimed that they have land properties in their name in the form of
agricultural land / plot, etc.
· More than 74% elderly
respondents have house property in their name. Out of 10000, 7454 respondents
said that they own house.
· Every 22/5th elderly
respondents (41.42%) have some kind of investments/savings with banks or other
financial institutions. 4142 respondents accepted that they have invested their
financial resources in various investment schemes run by banks/financial
institutions, real estate, stock market, etc.
· More than ½ elderly
respondents, interacted during the survey reportedly said that they have
jewellery and other valuable ornaments with them, bought over the years or
gifted by someone to them.
· Less than half (48.5%)
elderly respondents claimed that they have other valuable properties in their
name or under their ownership. Other properties included moveable properties
like vehicle, tractor, furniture, household items, cattle, equipments, etc.
· When value of net worth
of older persons was tried to assessed, it was found that more than 1/5th
elderly respondents (21.43%) have net-worth value of Rs. 20 Lac and above as
they own real estate, house properties, valuable movable properties, etc.
· Among these respondents,
845 i.e. 8.45% of total respondents said that their net-worth value is > Rs.
50 Lac while another 12.98% elderly claimed their net-worth value is less than
50 lac but above Rs. 20 Lac.
· Among respondents,
almost every 5th elderly (21.41%) has net worth value of Rs. 10 Lac
– Rs. 20 Lac while every 4th elderly (24.97%) has properties worth
Rs. 5 Lac but below Rs. 10 Lac.
· It was also found that
approx. 1/3rd elderly respondents have properties in their name
worth Rs. 5 Lac and below. Among these 16.35 respondents' net worth value is
almost nil.
· When impact on increased
net-worth value of older persons due to various factors, during the past decade
was assessed, it was found that according to 45.1% respondents, their net worth
value has increased significantly.
· 36.84% elderly
respondents said that they noticed average increase in their net worth value
during the last decade.
· Approx. 12% older
persons, contacted during the survey claimed that there is no significant
increase or almost no change in their net-worth value during the past 10 years,
while 6% elderly respondents claimed that their financial value of their
properties decreased during the past decade or they lost value.
Purchasing power of Older Persons
· According to 85% sample
elderly respondents (82% rural and 88% urban), spread across the country,
purchasing power of older persons has increased during the past decade. In
rural areas 4001 and in urban areas 4513 elderly people acknowledged that they
have more purchasing power, in comparison to elderly people of 10 years ago.
· Approx. 6.5 % elderly
complained that their purchasing power has decreased over the years, while 2.2
% said that it remained unchanged and 6% elderly respondents expressed their
inability to respond the question.
· Out of total 8514
elderly, who reportedly claimed that there is increase in purchasing power of
older persons, 7345 elderly (86.27%) said that increase in purchasing power is
significant, while 1041 elderly (12.33%) opined that its average and remaining
128 elderly said that increase in purchasing power of older persons is nominal.
Factors responsible for increase in purchasing
power of Older Persons
· Most older persons (25.8%)
reportedly claimed that their purchasing power has increased primarily due to
their well-settled children, who have shared their income with their ageing
parents.
· After this, 21.8% elderly
respondents claimed that increase in prices of their real estate properties is
major factor their increased purchasing power in old age.
·
For
1/5th elderly respondents (19.6%), their well-paid jobs / higher
pension amount is major factor responsible
for increase in their purchasing power.
·
18.6% elderly said that increase in their purchasing
power is primarily due to high returns on their properties
Actual Control on purchasing power
of Elderly
·
From the data collected from elderly,
during the survey, it was found that 37.8% elderly respondents use their
discretion while exercising their purchasing power as their purchasing power is
not controlled by their family members or other.
·
Almost 1/3rd elderly
respondents (31.7%) reportedly accepted that their purchasing power is often controld
by their younger family members.
·
Approx. 25.1% of elderly respondents
(2140 elderly out of 8514 elderly), enjoying good purchasing power said that
their spouses control their purchasing power.
·
Further 461 elderly (5.4%) said that
they are not free to use their purchasing power as other people control their
purchasing power.
Major Requirements in Old age
·
During the survey, 89% elderly respondents said that
they are facing medical/healthcare related problems, while approx 11% claimed
that their medical/healthcare related requirements are insignificant.
·
45.9% elderly respondents accepted that their social
and family support requirements are higher while 54.1% respondents did not find
their social/family support requirements worth mentioning, as majority of them
were enjoying family support.
·
More than 1/3rd respondents (36.6%)
claimed that their financial requirements are also among their major
requirements in old age, while 63.4% elderly claimed that their financial
problems are not so important for them.
·
It was also found that 19.8% elderly respondents
were suffering from legal problems, thus they included legal requirements among
their major requirements in old age.
·
Further, 22.5% elderly also responded that they are
also facing other problems other than medical, social, financial and legal.
·
When data pertaining to major requirements in old
age was further analyzed gender wise, it was found that old people facing
medical/healthcare problems include 65.5 % men and 34.5% women.
·
Among elderly facing social / family problems, 56.3%
were men and 43.7% women.
·
Elderly men were also facing financial problems more
than elderly women.
· When data pertaining to older persons' major
problems analyzed further, it was found that in urban areas 53.5% elderly as
compared to 46.5% rural elderly have financial problems among major
requirements in old age.
Proportion of Expenditures
· When proportion of expenditure made
by 8025 elderly respondents, who have some kind of monthly income analyzed, it
was found that 29.4% of their income is spend on medical/healthcare
products/services.
· Elderly respondents claimed that 26.9%
of their total income was spent on purchasing of foods/clothes for self/spouse.
· They spent 22.2% of their income on
their respective families/social obligations like education/ marriages of
grandchildren, treatment of family members.
· Almost 1/6 part of their income
(16.3%) was invested by them with various banks/financial institutions, etc.
·
During the study of the data compiled by volunteers,
it was also attempted to ascertain the Income and Expenditure Ratio of elderly
respondents. 57.6% of the total respondents reportedly claimed that in their
opinion their income is greater than their expenditures.
·
5.5% elderly respondents said that their income is more
or less equal to their expenditures.
·
According to 36.8% elderly respondents their income
is less as compared to their expenditures. They said they hardly found their
income enough to meet their expenditures.
·
On an average, 18% elderly respondents consider
their income is good enough in comparison to others, while 23% said their
income is not good but average.
·
Almost 1/4th elderly respondents claimed
that their income is below average, while 15% elderly said that their income is
very low while almost 20% claimed that they have no/ negligible income.
Older Persons contribution in
Family Expenditure
· 58%
older persons claimed that they contribute in their family's expenditures while
20% elderly respondents said that either they are not in a position to
contribute in their family's expenditure or they don't contribute at all.
· 22%
elderly respondents claimed that they contribute in their family's expenditure
sometimes only.
V. Behavior of Old People as Consumers
Older Persons are primary shoppers
in traditional family system
In
traditional family system of India, older persons are generally given the
responsibility of shopping for day-to-day utilities for their respective
families. As majority of them enjoy this
responsibility as they may have comparatively more free time, they may be head
of the family, who look after financial matters of the family.
They are willing to pay extra for
quality
Older
consumers are not necessarily conservative and purely price-sensitive, they
often pursue value and quality rather than low prices as they understand that
quality costs. They are most likely to spend more on health-related products
such as food and pharmaceuticals. However, there is a growing trend in
purchases of higher-end goods such as personal luxury items.
They are open to new ideas and
things
Although
they tend to stick to products or services they are familiar with, they are not
hesitating for newer ideas. They have a strong desire to improve their quality
and enjoyment of life in retirement and they are likely to make choices based
on experience and a confidence in knowing what they like, and having the
patience and self-confidence to learn and to try new things.
They are health and wellbeing
oriented
Changing
lifestyles and the increasing prevalence of chronic conditions have made
elderly consumers more concerned about their health and well-being. They are
increasing their purchases of health foods and nutritional supplements. While
also paying more attention to their emotional health by participating in
religious, travel and leisure activities.
They are ready for Digital
connectivity
Indian
elderly, particularly young old people (60-70) are taking up the digital age by
driving growth in online transactions, online payment and social networking.
The trend of digital connectivity will continue among the elderly segment as
consumers increasingly perceive the benefits and convenience of internet based
activities.
VII.
Representative Statements
"During the past decade prices
of my house and land properties have increased and now I earn a good monthly
income in form of rent and return from investments with banks. My health is not
well I have to visit doctors and hospitals regularly. I spent my most of income
on my medicines and medical treatment." -Sudhakar Trivedi, 75,
Gurgaon, Haryana
"We
have no regular source of income except sale of crops during season. Our
children are settled abroad and hardly visit us. However, they transfer money
in our accounts on regular basis; hence finance is not a problem for us. We are
not at all interested in saving money at this stage of life and spent almost
all money on our health wellbeing and social obligations."
- Rajwanti Kaur,
69, Jallandhar, Punjab
"Being
an old man sitting idle at home after retirement, responsibility of shopping
for almost all daily utilities and services is handed over to me by my family
members. Therefore I have to use my own discretion while purchasing goods and
services for my family. I hardly take advice from younger family members for
general and day-to-day products and services."
-Shiv
Shankar Reddy, 75, Chennai
"I have to spend substantial part of
my income on my younger family members, as their income is not enough to take
care of entire family. I have land and house properties in my name and get good
income in form of rent from tenants. Despite, being the head of the family, my
family members hardly consult me whenever they go for big/important financial
deals."
-Khatoon
Nisha, 81, Kolkata
"I earned good money even after my
retirement, but my poor health condition is a cause of concern for me as I am
living alone with my wife. I am looking for suitable health insurance scheme
for us, but there are no such policies/schemes, on which I can depend. "
-Pankaj
Dandekar, 64, Pune
VIII.
Observations
For
older persons, who have earned money with their hard work and efforts and have
self-acquired net-worth, value of money matters most. Older persons with sound
financial status, live to the fact that consumer is the king and tend to have
good value for their money. It has also
been observed that financially well-settled older persons prefer to utilize
their purchasing power for sake of better life in old age.
With high net-worth value, older persons have higher purchasing power,
but they hardly use their discretion while exercising such powers. Younger
family members often control their decisions. That's why in spite of
major role and active participation of older persons in country’s economy, they
are still considered as negligible consumers in comparison to the younger
generation.
Due
to change in financial status and ever increasing independence of older
persons, particularly belonging to middle, upper middle and upper classes,
their role in financial activities has also undergone significant change over
the years. Today, they can be observed to be active consumers of various
products and services and embarking on other financial activities.
· Net-worth value of older persons has
increased primarily due to sharp increase in real estate prices over the past
two decades. During the survey it was also observed that property entitles
remain in the name of older persons for longer years as their life span has
also increased significantly over the years.
·
It
has been observed, that attachment of older people towards their financial
resources and properties has increased over the years due to comparatively
longer life span in old age. Ever increasing role of money in modern lifestyle
is also seen as major factor responsible for older people's attachment towards
financial resources.
·
With
changed socio-economic and demographic scenario, mindset of older persons have
also changed towards utilization of their net-worth as they want to get fuller
benefit of it during their life.
IX.
Expert's Observation
Senior
Citizens as a Buying Segment
Whenever any product is
transacted, there are 5 roles being played actively on the buying side:
1.
Buyer: The role of deciding which of the
products must be bought from among the alternatives available. This role would
span from the identification of alternatives to the finalization of the
ultimate choice.
2.
Negotiator: The role of negotiating the
final price and the terms of payment and delivery.
3.
Payer: The role of actually footing the
bill.
4.
Influencer: May be responsible for no
decision but may exert a mild to strong influence on the decision making at
various stages.
5.
Actual user: The person (s) who would be
the real user / beneficiary of the product.
Quite often, a single
individual may play many or all of the above roles. Hence, the terms “consumer”
and “buyer” and “customer” are generally used interchangeably. However, a
little thought would help one see several situations in which the roles are
played by different individuals – thereby increasing the complexity of the
buying decision making process. For example, when a car is bought for the
secondary earning member of the household, the Actual User is the particular
individual but the Payer may be the lead earning member, who may also be the
prime negotiator. The kids and elders in the family may have an influence on
the purchase decision. An intelligent marketer would be alert to this reality
and would target different elements of the marketing communication to address
all the participants in the decision-making process.
Senior
citizens as a target audience for marketers
The popular discourse
in India today is that India has a huge and growing young population with an
insatiable appetite for consumption. Many marketers are focused on the youth as
the primary target for products and communication for a wide spectrum of
products – be it vehicles, vacations, gadgets, personal care products, apparel,
entertainment and what have you. The segment of senior citizens appears to have
been relegated to a much lower priority. However, marketers need to revisit the
importance of senior citizens as a target audience for their efforts. For this,
they must carefully examine and understand the involvement of the senior
citizens in each of the roles enumerated above.
There would be several
products in which the seniors are playing ALL the roles. This would be true for
almost the entire spectrum of products in cases where the senior citizens
financially independent and are living by themselves. However, very often
senior citizens may be staying as members of a joint family. In such
situations, they may often exercise a very powerful influence on the purchase
of several products and services – even if they themselves may be a part- user
or a non-user. This could be because of social and cultural traditions of India
or, at times, also because the household is partly dependent on the wealth of
the senior citizens for the quality of survival. The wealthy seniors in India
often indulge the youngsters with gifts – hence they exercise influence on
purchase decision of products which they don’t use themselves! In addition,
given their financial strength and experience, they may be the most important
decision makers for financial products and services and real estate for the
entire family.
Senior citizens who are
fit and active and yet embedded in joint families also tend to contribute to
sharing in household workload. One dimension in which they often contribute is
to manage the regular shopping responsibilities of the family. They may not be
funding the shopping, but they would be making most of the decisions for the
products and consumables of regular use. In these cases, the seniors are the
finicky Buyers and demanding Negotiators though not the payers. Marketers would
overlook their extreme importance only at their own peril.
Then there is a large
spectrum of products for which the senior citizens are the primary Actual Users
– medicines, hearing-aids, walking -aids, special clothing, gadgets, health
attendants, meditation classes, etc. For such products, they may or may not be
the payers or the buyers – yet the products are for them. With the numbers of
senior citizens growing, this class of products and services would see a fast
growing market. And, since senior citizens have several physical challenges,
they tend to need higher order of customization of products and services and
communication about the same– thereby enhancing the degree of challenge for the
marketers. It is for the enterprising marketers to take cognizance of the
challenge and establish themselves in positions of advantage relative to the
competitors.
-
Santosh Kumar Sood, Agewell
Volunteer
X.
Conclusion:
Since
ageing of the population affects every aspect of society and economic activity,
old people should also be recognized as a significant consumer group with
shared and specific needs, interests, and preferences. Governments,
manufacturers, service providers and civil society should take into account the
views of older persons on the design of products and delivery of services.
Older
persons constitute an increasing consumer group with specific needs and
significant aggregate purchasing power. Policymakers at various levels of
government must encourage manufacturers and service providers to bring to the
market more products and services for older people.
It
is therefore important to educate the market about products and solutions,
meant for older persons and to provide continuous training as well as support
to create a competitive market for older persons-friendly products and
services, so that specific needs and requirements of millions of older persons
could be addressed.
However,
Governments, service providers, and civil society should promote the concept of
creating products and services for all ages, which would support older persons’
full participation in society.
Aside
from the differences among key generations, there are many emerging consumer
trends in the market of products and services being used by older persons.
These trends are believed to be more prevalent in the next few decades and
particularly relevant to address market players.
Corporate
sector must consider the potentials of products and services tailored to the
needs of older persons. Policymakers may furthermore want to promote
mainstreaming ageing in the spheres of production, distribution, advertising
and the selling of products and services, given the great benefit for older
persons as well as companies and the overall contribution to the economy and
the society.
Designing
products in a more user-friendly and practical manner can enable older persons
to cope with difficulties in their daily life. Providing accessible and
available services and products can significantly contribute to the aim of an equal
social, economic, political, and cultural participation of older persons.
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