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

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. •With increasing age consumers usually spend less and adopt innovations more slowly.•The prevalent static view on aging overestimates elderly consumers' spending power.•High-income couples spend more and adopt products quicker than single households.•Also in older age, people engage in new partnerships, particularly without marriage.