The elderly man, surrounded by his grandkids, talks dreamy-eyed to them about the power and thrill of riding a Harley-Davidson motorcycle. One of the children asks excitedly: “You owned a Harley?”

“I never got it,” the old man confesses. “I spent the money on aluminium siding.” The Harley-Davidson television commercial ends with the challenge: “What stories will you tell?”

The ad is part of a highly successful campaign by Harley-Davidson to expand its market to older consumers. But the ads, and the older people featured in them, are just a small part of the campaign. Harley’s message is not that it is a product for the elderly. It is a product for people who want to live life to the fullest. They have been successful because they understand that these two groups are one in the same.

More than $4 trillion in spending
The “grey market,” or “silver market,” as it is sometimes called, is generally considered to be consumers over the age of 50. This huge market is growing rapidly due to simple demographics. People all over the world are living longer.

In the United States, a government-sponsored report put the number of people 65 or older at about 37 million people – or 12% of the population. By 2030, that number is expected to rise to 71.5 million people, or about 20% of the total US population.

“Because of its sheer size and $2.1 trillion in spending power, more and more companies are waking up to this generation and adapting their business with an eye towards the boomer demographic,” says Eileen Marcus, a senior partner with the international marketing and communications firm Fleishman-Hillard.

And such spending won’t be limited to just the US.

“Life expectancy at birth in Japan is now over 82, making it among the highest in the world,” notes Yuwa Hedrick-Wong, in the book The Glittering Silver Market: The Rise of Elderly Consumers in Asia.

“In the past, population ageing was observed mostly in industrialised countries,” notes the author. “Not anymore. Most East Asian countries today are exhibiting patterns of rapid ageing.”

For affluent countries in Asia – Japan, Korea, Taiwan, Hong Kong, Singapore and Australia – spending by elderly consumers is estimated to reach $1.5 trillion by 2015, with another $430 billion to be spent by elderly households in developing Asian countries, according to Hedrick-Wong.

The grey market is not black and white
This massive, lucrative market is like few others that have come before it. These are not the seniors whose values were forged during World War II. If there is one over-riding attribute of today’s grey market, it would be its complexity.

“This is a huge single market category that spans 30 to 40 years of a person’s life as a consumer,” says Dick Stroud, the managing director of 20plus30, a consultancy that specialises in marketing to 50-plus consumers. “It is a category that covers all the variants of wealth, health, education, marital status and geography, not to mention the male, female split. Clearly it is a complex market.”

“Unfortunately,” Stroud continues, “it is too often seen as a homogeneous group that lumps together the fit, wealthy fifty-something with the ill, cash-poor, 75-year old.”

Hedrick-Wong has a similar conclusion: “In Asia, the stereotypes of the elderly are either homebound grannies doting on grandchildren or old men taking it easy playing chess and drinking tea. However, emerging evidence suggests otherwise. As consumers, many of the elderly will maintain an outlook of exploration and an enthusiasm for new experiences, and in consumer marketing terms, a willingness to try new products and services and use new technology.”

An October 2008 study by Synovate made some surprising findings along this line. In a survey of grey consumers in Singapore, Malaysia, Hong Kong, Taiwan and Korea, the firm found that 90% of elderly consumers in Korea were mobile phone users, and a third of those in Hong Kong used MP3 players. The same study found that more than half of elderly consumers used web-based email systems in all of the countries where the survey was conducted.

Synovate found grey consumers have high disposable income, put health and children as their top priority, have an interest in sightseeing holidays and want tangible offers such as instant discounts.

Healthy aging and retirement
How to market to this huge, diverse group is a topic of fierce debate and discussion among marketing professionals.

Though there are many grey marketing trends being discussed, one of the basic focus areas – the closest to a “sure thing” for this market – is in the area of health and wellness. The Synovate survey found that health was the number one priority for grey consumers in most markets.

Another core area for this huge market will be in financial management and retirement planning. Retirees are no longer resting out the last few years of their life. Retirement is now a long, third stage of life that will require significant financial planning and management.

“Boomers may spend twenty, thirty or more years in retirement – however we define it – and it may turn out to be their longest life stage,” says Sandra Timmermann, the Director of the MetLife Mature Market Institute. “They will look for two types of advisors – a life coach to help them think through how they want to spend the rest of their lives, and a financial coach who can help them figure out how much money they will need to last throughout their lives.”

The days of grey marketing through sentimental advertising spots featuring kindly, bumbling elderly folks are over. The new silver generation has been catered to all their lives, and they won’t expect that to change in their latter years. It is up to marketing professionals to come to grips with this huge demographic and connect with it in a meaningful way.

“The silver market of elderly consumers is set to glitter,” says  Hedrick-Wong. “The reward is expected to be great when businesses get it right.”