For many a marketer, `upscale' means high end of age range

Yuppies may be a glamorous group to sell to, but cash and assets have a glamour of their own. Slowly, companies are shifting their gaze from the baby-boomers toward mature buyers. In the process, they are chasing the biggest economic force in the country -- and occasionally getting burned when they do so insensitively.

Almost every major airline offers discounts for senior citizens to fill up their seats midweek. Johnson & Johnson comes out with a shampoo for the hair of people over 40. Southwestern Bell brings out the ``Silver Pages,'' a Yellow Pages for people 60 and over.

Copper Mountain, a ski resort near Denver, forms three chapters of its ``over-the-hill gang'' for skiers 50 and over -- which, incidentally, helps populate the slopes midweek. Sears, Roebuck & Co. founds the Mature Outlook Club, which offers discounts on a variety of products and services (not just from Sears) to anyone over age 50.

``Any consumer product company knows that this is an enormous potential market,'' says Synetta Armstrong, a spokeswoman for Silver Pages. ``Their fingers are very active. They have the money and they want to splurge.''

People between age 50 and 65 are at their peak earning power; even when their incomes drop after retirement, they can generally maintain their standard of living because they have fewer expenses. In fact, the further along in years people get, the more ``discretionary income'' they have to spend on luxuries like cars and cruises.

The average person 65 or older, for example, has twice as much discretionary income as someone under 40. (Discretionary income is income beyond what is necessary to maintain a reasonably comfortable standard of living; only about 30 percent of American households have it.)

That means, according to the Conference Board, which got its statistics from the Census Bureau, that one-fourth of the population has half the nation's $260 billion of discretionary income; 77 percent of total financial assets; and 70 percent of the nation's aggregate wealth. The average net worth of people over 50 is five times as large as those under 50.

By contrast, the baby-boomers so aggressively pursued by marketers are the first generation in years to be worse off than their parents. Economists say that buying expensive stereos and cars, eating out, and taking exotic vacations conceal the fact that many can't afford the big-ticket items like homes.

They are postponing buying houses and even raising children until their 30s, when they command higher salaries. Even then, and even with the benefit of two incomes, they often have trouble making ends meet.

Even as companies are realizing the limitations of Yuppie buying power, market studies are debunking myths about older people. Myths like: Seniors stick with the same brands and therefore aren't a good target for advertising. In fact, a study by Yankelovich, Skelly & White last year indicated that older people are just as likely to switch brands as young people.

Another myth: Retired people tend to be poor. Actually, in 1984 the poverty rate of people 65 or older was lower than the national average (12.4 percent vs. 14.4 percent).

``The pendulum has swung tremendously,'' says Steven Mehlman, manager of editorial services at the American Association of Retired Persons. In the 1960s, he says, older people had an image of being impoverished, unable to buy proper food or take care of themselves. Now they are touted as ``playing on a golf course outside of their condominium in Florida.

``Neither is true,'' he cautions, pointing out that one-third of single women over 65 live in poverty. ``Not all are poor, not all are rich. It's a very diverse market.''

Cheryl Russell, editor of American Demographics magazine, agrees. ``If you follow any elderly person over time, his situation gets worse, not better.'' But what is emerging is a group of far wealthier new retirees with larger pensions who have contributed more to social security (and thus get more back) than their elders.

Only now are companies becoming sensitive to the fact that the mature market is not homogeneous and that not everyone should target this group. As medicare rates have fallen, for example, hospitals aren't getting the same reimbursement. One of the hospital clients of Grey Advertising, for example, ``is shying away from the mature market,'' a spokeswoman says. ``They'd rather have workmen's comp'' patients.

There's also the danger of alienating your best customers, says Maurie Webster, executive director of the ``36 to 64 Committee,'' a group of radio stations with an older listenership. ``Radio stations often turn down ads for denture cleansers and pain relievers, because these ads tend to drive away the most affluent buyers and the best advertisers,'' he says.

The ``36 to 64 Committee'' mirrors the turnaround in attitudes toward the mature market. ``Four years ago, these stations were trying to conceal their listenership,'' he says. But in 1982, about a dozen stations, mostly easy-listening music stations, banded together to market their listenership to advertisers. Now there are 260 member stations.

Insensitive targeting can backfire, however. The classic example was a line of soft foods, called ``senior foods,'' which H. J. Heinz brought out a few years ago. The line flopped, says Ms. Russell at American Demographics, because ``people buy young. They don't want to be singled out as elderly.''

The people at Johnson & Johnson Baby Products became aware of that in 1984 when they introduced Affinity Shampoo, which was geared for older hair, hair that had been damaged by permanents, dyeing, or just by age. When they test-marketed Affinity, spokeswoman Nancy Musco says, the advertisements said it was for people over 40. After a year, the ads dropped any reference to age.

``It was a delicate situation,'' Mrs. Musco says. ``You don't want to offend people.''

How people view themselves is finally reaching the world of advertising. True, there hasn't been a marked increase in the number of older models, says Kathy Willinger, an agent at the modeling agency Funnyface. Funnyface specializes in ``real people'' models and has about 100 models over age 40, out of 300 total.

But with the advent of the Reagan administration, she began seeing a trend away from ``charactery'' (ethnic and ``funny looking'') models to upscale ones.

Before that, she says, ``when [an advertiser] called for an older model, they wanted the Fruit of the Loom lady, someone in a rocking chair with cats. Now they want someone who looks like my mother: sophisticated, healthy, trim.

``People's concept of older is changing. `Middle age' is expanding into the 60s.''

That is proving an opportunity for some companies and a threat for others. Only in the last couple of years are airlines cashing in on the fact that older adults (55 and over) make up 20 to 30 percent of travelers for pleasure but contribute 70 to 80 percent of the travel dollars spent, says Leonard J. Hansen, president and director of Senior Publishers Group.

The first breakthrough occurred when Eastern, then TWA, offered people 65 and over unlimited flying for a year for $1,299. Mr. Hansen predicts that the recent spate of discounts to get those over 60 to fly midweek will soon extend to the whole industry.

Meanwhile, in another industry being deregulated, financial institutions are trying to hang onto their older, highly profitable clientele.

Thrifts especially, which have a high percentage of older customers, fear losing them to institutions that can give them more than a 5 percent return on their savings. American Savings Bank in New York, for example, formed a ``Fifty-five and Better'' club in September which gives free checking or free money orders, as well as discounts to movies and other events, for those with a savings-account balance averaging $5,000 or greater.

``Older customers are becoming far more sophisticated in the way they view money,'' says Cheryl Bell, American Savings' senior vice-president in charge of marketing. The club is a way to ``lock them in'' so they don't stray over to banks offering a variety of financial services, brokerage houses, and nonbank banks like Sears.

Marketers say that attention to the mature market is still the exception in most industries. But that won't last, they say. As corporate America recognizes this relatively untapped market, older customers will finally get the attention their numbers and affluence deserve.