Marketing Management – B6007

The Nanyang MBA

NANYANG TECHNOLOGICAL UNIVERSITY

HOW TO MAKE RETIREMENT HOMES

REALLY WORK

NANYANG BUSINESS SCHOOL

THE NANYANG MBA

B6007 - Marketing Management

Individual Written Assignment

Course Instructor: Professor Hooi Den Huan

Submitted By:
Chong Sheng Jiat, Corey
G0802600K
30 April 2009

Page 1 of 18
 Marketing Management – B6007
The Nanyang MBA

INTRODUCTION – THE DEMOGRAPHICS FACTOR

Business is booming in the ageing industry, or others might call it the “silver industry”

illustrating the hair color of elderly folks. By 2030, 20 percent of Singapore's population will

be 65 years and older, according to local press (Majid, 2007); while in Japan, the number of

people over the age of 65 has reached 21.6 percent of total population, or about 27 million

people (Data360), categorizing Japan as a “hyper-aged society” (Coulmas, 2007).

As developed nations face a rapidly ageing population, political leaders view it as an area of

concern because of social and economic issues - an ageing population negatively affects a

nation’s growth. Due to Japan’s strict immigration policy, the following image illustrates the

wide gap between Japan and more developed regions. Our group focuses on Japan as the

geographical target market for the retirement village business due to the large market size

and potential in Japan.

Source: United Nations, World Population Prospects. http://esa.un.org/unpp

Page 2 of 18
 Marketing Management – B6007
The Nanyang MBA

A WHOLE NEW LIVING CONCEPT FOR RETIREES

The Aspire Homes concept is to

create a Fun and Happy Living

Community for retirees, where

everyone genuinely cares for one

other within the community, including

staff members. As mentioned in the

project presentation, insights from

movies such as Patch Adams, the

Curious Case of Benjamin Button

and Monsters Inc. created the basis

for the Aspire Homes business idea.

We believe the greatest cry of the elderly population is for love, compassion and attention.

In Aspire Homes, we seek to increase the old folks’ vitality towards life, using fun activities,

with humor and intimacy between caregivers and amongst themselves. We have a clear

focus in making the old folks happy so as to enjoy a good mental health. In this report,

details are filled in on how to make this seemingly utopian community really work in Japan,

with a focus on applying marketing frameworks and concepts.

The Aspire Homes Service Ethos spells out our objective:

1. We treat the elderly both as a child and as an adult at the same time, and seek to

understand their complex needs and wants.

2. Rather than treating and caring for old folks at arms-length, we seek to build an

intimate relationship with the elderly; have an incentive system and credo in place

Page 3 of 18
 Marketing Management – B6007
The Nanyang MBA

within the community; and to provide real warmth and comfort for them.

3. We believe good health is closely related to having close friendships, meaningful

work in life (no matter how trivia it is) and have an engaging relationship to the arts,

nature, wonder, curiosity, passion and hope.

Communication is an important factor in creating intimacy with the elderly. If you had ever

visited an old folks home, you would have stepped into the blanketing silence, which is only

broken sometimes by groans of pain from the old folks. The nurses and staff rarely

communicate with the old folks.

According to Connie Podesta, the most effective and healthiest form of communication is

the assertive style. It is how we naturally express ourselves when our self-esteem is intact,

giving us the confidence to communicate without games and manipulation. When we are

being assertive, we work hard to create mutually satisfying solutions, and communicate our

needs clearly and forthrightly. We will care about the relationship and strive for a win-win

situation, and we know our limits and refuse to be pushed beyond them just because

someone else wants or needs something from us. This is the form of communication we

seek to achieve in Aspire Homes – within the community between the caregivers, medical

staff and the old folks.

LITERATURE REVIEW

In this report, a brief literature review on problems and issues of existing residential homes,

the stereotyped elderly profile and Kevin Roberts’ Lovemarks concept are detailed herein.

We will compare and contrast these different ideas and explained how some of these ideas

can be used in the Aspire Homes.

Page 4 of 18
 Marketing Management – B6007
The Nanyang MBA

Professor Richard Hugman’s “Ageing in Space” paper examines the complexities of old age

and provides critical insights into structuring space for older people in terms of both physical

(location) and social (milieu). Institutional forms of residential care vary in different parts of

a country and between countries as illustrated in the comparison table below:

Traditional Old Folks Homes Aspire Homes

Objective All aspects of daily life takes place in one
place which is shared with people with
whom any individual need not have a
prior relationship (and so with whom she
or he might not have chosen to live).
• Creation of a living community based on
a specific society theme (city or rural)
where the elderly people can live out
their lives in a fun and meaningful way.
• Elderly people can choose congregate
living or independent living based on
individual needs and wants that are
made possible by the use of technology
and correct hiring of caregivers.

Role of • Formal Staff-Old Folks Culture with • Non-Medial (Social Care) Informal
Place little or no understanding about the old Culture with staff at friendship level
folks. understanding of the old folks.
• Medical (Skilled Care) and Non- • Provide limited Medical Care to cater for
Medial (Social Care). emergencies.

Nature of Old aged care, mental health issues, Old aged care, early-stage cancer, early-
Stay amyotrophic lateral sclerosis (ALS), stage mental health issues, cognitive
multiple sclerosis (MS), traumatic brain impairments and Alzheimer's disease.
injury, cancer, paralysis, developmental
and physical disabilities, cognitive
impairments and Alzheimer's disease.

Caregiver’ • Staff exercise power over even the
s and most personal aspects of daily routine
Care- (including the use of time and space).
receiver’s
Role • An arms-length “service” transaction.
• Each caregiver and care-receiver may
be subject to preset roles due to
• Intimacy is the greatest gift a caregiver
can give the old folks, especially at a
vulnerable stage in life or with intractable
pain or chronic, unsolved medical
problems.
• No “service” transaction involved.

Page 5 of 18
 Marketing Management – B6007
The Nanyang MBA

circumstances or monetary benefits. • Caregiver and care-receiver roles are

based on willingness to give or fit into
community.

Arrangem • Separation of a group literally and/or • Separation of a group literally and/or

ent of symbolically from the rest of society;
Space
• Limitation or denial of individuality
through the over-riding demands of
attending to needs at the level of the
lowest common denominator within
the group.
symbolically from the rest of society in
order to create a level-playing field
community.
• Sustaining of individuality through
focusing on needs and wants of each
individual.

Treatment 1. Active Lifestyle / Ageing 1. Specialized Active Ageing; to know the

of old folks in all their complexities.
2. Independent Living
Customer
3. Congregate Living 2. Increase old folks’ vitality towards life.
4. Assisted Living 3. Build close friendships with them and
assign meaningful community work.
5. Continuing Care
6. Nursing Care 4. Encourage them to take part in activities
of nature, the arts and social interaction.
7. Alzheimer’s Care
5. Alzheimer's disease treatment:
8. Rehabilitation Care.
Intellectual activities such as playing
chess or regular social interaction have
Note: Please refer to Appendix – Definitions.
been linked to a reduced risk of AD in
epidemiological studies (Bennett,
Schneider, Tang Y, Arnold, Wilson,
2006).
6. Set up Silver College for intellectual
stimulation.

Focus of • Staff-Customer “acquaintance” form of • Assertive form of communication.

Communic communication.
ation • Village-like setting, where everyone
• Authoritative approach with staff trusts and depends on each other.
having control over elderly people’s
• Regularly generate activities in the
use of all space and time.
nature, arts and social forms of
interaction to promote communication.

In seeking to create a living community based on a specific society theme (suburban or rural)

where the elderly people can live out their lives in a fun and meaningful way, volunteering,

Page 6 of 18
 Marketing Management – B6007
The Nanyang MBA

spiritual and community activities are essential. This will

generate a sense of comradeship and is vital to an

individual’s self-esteem restoration and can help with

social inclusion, healthy living, life-long learning and

active aging (Active Community Unit 1999). It is fact that

as human beings we build social relationships with the

things or object that we create, imbuing our feelings with

Mr. Yasujiro Yamaguchi them (Norman, 2004). Art, literature, music and poetry
Master Weaver
103 Years Old have always seemed to be able to spark our emotions

and thereby creating an impression. Thus, participating in leisure, social, cultural and

spiritual activities in the community allows older people to continue to exercise their

competence, to enjoy respect and esteem, and to maintain or establish supportive and

caring relationships. Such forms of participation can be achieved through Aspire Homes’

partnership with local interest groups, schools or non-profit organizations, where the elderly

can teach, impart and make use of their life skills. For example, the elderly with music skills

can teach school children in the rural schools and create a bond with the children. For those

who are previously artisans (as depicted), or possess certain life skills, can create artifacts

in their spare time at their own pace. These artifacts can then be sold, given out as gifts or

traded within the community. This is the key to good health because it requires the use of

brain and movement of limbs, and most importantly, an attachment to something in life.

Kevin Roberts’ concept on the Lovemark is characterized by “Mystery”, “Sensuality” and

“Intimacy”, which is synergistic to our project idea. The service that we provide for the

elderly within the fun and happy living community must be high in the love/respect axis. It is

Page 7 of 18
 Marketing Management – B6007
The Nanyang MBA

the people within Aspire Homes community that define and

live out the Lovemark characteristics, including customers,

employees, management and shareholders. Our service

must be more than a brand or a fad, and definitely not a

commodity like other residential homes can easily provide.

As Roberts had rightfully pointed out in Chapter 7 of his

book that “every person we deal with is an emotional human being and yet business had

been treating them like numbers.” The ultimate goal of Aspire Homes is to create a sense of

ownership, finding a meaning in life, having fulfillment and a sense of self in the elderly. This

will empower Aspire Homes as a Lovemark – made possible by the elderly having an

absolute belief in the community, and trust in our love and intimacy with them.

For some individuals who prefer independent living, we have to note the different

interpretation on the meaning of independence. Burholt and Windle (2001) noted that for a

few older people it means not receiving any help from formal services and relying entirely on

aid from family member. For the majority of older people, it means getting help with personal

care and other tasks in order for them to avoid burdening their children or friends with care

duties thereby building a relationship which can appear to be unequal.

In-depth analysis is provided in Heywood’s (2001) research on older people who stated that

they did not want their children to help wash them or have their spouse to help them onto

the toilet. In addition, older people do not like being seen naked by their neighbors, which

implies that esteem and individual space is necessary to maintain a sense of self.

Lastly, the Aspire Homes concept focuses on the 'empowerment' of caregivers, employ

'empowering practices', and working in partnership with the elderly. However, there is a gap

Page 8 of 18
 Marketing Management – B6007
The Nanyang MBA

between the aim of user empowerment in community care and the reality. Although

empowerment has been cited as beneficial to caregivers there has been a failure to address

how it might be achieved (Burholt and Windle, 2001). Caregivers are generally volunteers

and social workers in our modern society. Training is therefore essential to increase

caregivers’ knowledge about services. We seek to improve this situation by advocating an

effective incentive system based on meritocracy and credo to be in place within the

community. This would empower caregivers, changing them from volunteers on live-by

allowances to become service professionals – increasing their levels of perceived control,

self-efficacy and self esteem (measures of psychological empowerment).

MARKET SEGMENTATION – BUILDING THE BUYER PROFILE

The Japanese Baby Boomer generation (Boomer) refers to the Japan population born

between 1947 and 1949, known as the dankai generation taken from the Japanese

geological term for “nodule.” In an interview with Channel News Asia, Kim Walker, CEO of

the Silver Group, gave sound advice about old people:

• Age is just a number. The elderly dislike to be referred to as an old person.

• Senior citizens want to be taken seriously and not seen as just old.

• In terms of spending, old people is more conservative and are more discreet.

According to Mr. Haruki Takatsu, managing director of the Research Institute for High-Life,

the dankai generation does not like products that are marketed explicitly to the Boomers

category. In terms of consumer perception, the word “silver”, often used in Japan to

describe products or services for seniors, implies a “withdrawal from society” or “old age”

which the Boomers and retirees rejected. Boomers tend to perceive themselves as youthful.

Page 9 of 18
 Marketing Management – B6007
The Nanyang MBA

This is true, according to a new study of aging from the University of Michigan and the Max

Planck Institute for Human Development in Berlin that older people feel, on average, about

13 years younger than they really are.

Boomers are also quite positive about what lies ahead, and many of them have things they

would like to do and dreams to fulfill. The dankai segment in Japan have considerable

spending power and are computer-savvy, therefore Aspire Homes should provide activities

that boomers were enthused about in their younger days. For example, photography,

listening to music, playing a musical instrument or singing in a chorus, group hiking or

country living. These people are sometimes called “active seniors”, drawing upon the fact

that they are still physically fit enough to enjoy such physical leisurely activities.

MARKETING INSIGHTS: DESIGNING AND MANAGING SERVICES

There is significant profitability if companies deliver superior customer service. Southwest

Airlines, Charles Schwab and American Express know these advantages well. In this

section, we will address the designing, marketing and managing of services, aligning with

the goals of Aspire Homes to create a strong brand.

In terms of the service mix, Aspire Homes fall into the category of providing a major service

with accompanying minor goods and services, with the following distinctions:

1. People based service with professional caregivers.

2. Independent living format but with close-distance care support and a congregate

community activity format.

3. Requires client presence and meeting personal needs.

Page 10 of 18
 Marketing Management – B6007
The Nanyang MBA

4. Aspire Home is positioned high in experience qualities and credence qualities as

depicted below:

Aspire Homes

High in Search High in Experience High in Credence

Qualities Qualities Qualities

Source: Continuum of Evaluation for Different Types of Products, Valarie A. Zeithaml

5. Consequence of point 4: customers rely on word of mouth rather than advertizing;

rely heavily on price, personnel and physical cues to judge quality; are loyalist if

satisfied with service; and switching costs are high for them.

Distinctive Characteristics of Services

In positioning Aspire Homes as a “fun, happy, living community” for retirees, here is a list of

positioning strategy that can be made tangible through marketing tools:

Aspire Homes
Onsen & Garden

Page 11 of 18
 Marketing Management – B6007
The Nanyang MBA

1. Place – The exterior should be

clean, spacious and with lots of

green foliage surrounding the lobby

of the main community area and

living quarters (especially Bonsai,

Zen gardens and Koi fishes based

on the Japanese theme). The

interior should have clean and simple lines – from the diaphanous shoji screens to

the sparse decor. The design style should carry the essentials of Japanese culture –

serenity, tranquility, harmony, and balance with nature. The interior serenity should

sometimes be broken with sounds of conversation and laughter from the old folks

participating in activities, so as to amaze visitors and draw customers into finding out

the ‘mystery’ by joining the community.

2. People – Caregivers should display a clean, helpful and respectful image but

dissipating a youthful energy. Human contact should be maximized and members

should not be left feeling lonely or without aid.

3. Equipment – Home products used within the interior should look relatively new and

must be clean. Community amenities like Onsen (public baths), television sets,

mahjong rooms, lecture rooms (for life-long learning in Silver College) and massage

rooms should be well-furbished.

4. Communication Material – Testimonies shown on TV screens should be playing at

front lobby. Printed materials to suggest different activities for members to participate.

Photos of old folks with family visitors should be readily displayed at a pin-up board.

Page 12 of 18
 Marketing Management – B6007
The Nanyang MBA

5. Symbols – Old folks and employees to suggest a fun living community, creating

meaningful life experiences and fulfilling social interaction. Launch a Top Five list of

Artisans who give back to the community with their competencies (refer to pg 7 on

active ageing) and a Top Five list of life-long learners in Silver College (encouraging

intellectual stimulation for the elderly).

6. Price – Aspire Homes to take care of your golden years, sustaining recurring service

fees with your pension or retirement funds, without the need to worry about

affordability.

MARKETING CHALLENGES

Several marketing concepts such as market segmentation and in-depth analysis of the

buyer profile have been discussed in this report. But various challenges still persist in

execution of this business concept in our targeted geographic region – Japan. In terms of

marketing challenges, we explore issues regarding social-cultural and segmentation

understanding, especially the shift in Japanese culture towards the elderly by family

members, rural context challenges and sexuality of older people.

With reference to a 20-Year Bangor Longitudinal Study of Ageing (BLSA) (1979-1999)

conducted in rural Wales:

1. Community care was not targeted at older people prior to entry into residential care.

2. Changing migration patterns of older people.

3. Disparate incomes affect housing choices.

4. Types of networks consist of different types and quality of relationships.

Page 13 of 18
 Marketing Management – B6007
The Nanyang MBA

5. Gender differences exist in relationships.

6. Close family relationships were not necessarily stable and may change over time.

7. Pre-requisites for successful ageing were prioritized as maintenance of health,

mobility and independence.

The above conclusion on volatile family relationships is actually accentuated in the New

York Times’ article on “Retirement – Japanese Style” (see references). The article quoted

residents of a retirement village called Yuyu no Sato, saying they chose to live there

because they fear they may burden their children and that they prefer to retain their dignity

through independence. This marked a radical change of the Japanese culture in treatment

of their elderly, who, as the psychologist Takeo Doi noted, have customarily found solace in

the idea of mutual dependence. The article continued to quote Mrs. Matsumoto who said

that she found the complex (Yuyu no Sato) cold and lonely, underscoring the need and

demand for a new retirement village business model such as Aspire Homes.

One of the challenges include the rural context where

centralization of health and social services has made it

increasingly difficult to devise effective methods of

delivery of social care services to rural areas. The

provision of services to rural areas is also more costly

that in urban areas. This is due to a combination of

factors which include a lack of economies of scale,

increased travelling time, and a need to provide long-

distance transport for the elderly to seek health services.

Page 14 of 18
 Marketing Management – B6007
The Nanyang MBA

Thus, building a Retirement Village community with non-critical medical care facilities in a

rural setting will eliminate such problems.

Conflict is commonplace within a community setting where human to human relationships

matters. In particular, literature focusing on abuse of older people gives insight into how to

manage the Aspire Homes community. Abuse of older people was first document in 1975

by Baker with more literature appearing during the 1980s. Burholt and Windle’s (2001)

review indicates that abuse encompasses:

1. Physical abuse including the misuse of medication

2. Sexual abuse.

3. Psychological abuse including verbal abuse and racial abuse.

4. Financial, material or commercial abuse.

5. Neglect.

6. Community abuse exists in the form of harassment, humiliation and theft.

Another topic that is most commonly ignored in the Asian society is regarding Lesbian, Gay,

Bisexual and Transgender (LGBT). Studies in the Western academic suggest a need to

understand the relationship of older people, ageing and sexuality, specifically the need for

attention (Hinchliff, 2005) to older LGBT already in residential care or facing the need for

care. In this category of male and female retirees, they fear that residential care would

ignore such specific needs. In particular, there is a concern that staff would be heterosexist

and/or homophobic and not respect relationships. A most common distinction is existence of

some institutional exclusion policies in other residential care settings, such as being

prevented from visiting partners in hospital, or using the hospital overnight accommodation.

Page 15 of 18
 Marketing Management – B6007
The Nanyang MBA

Moreover, LGBT minorities may experience hostile, phobic and negative attitudes of health

care workers regarding their identity. In applying such insights to Aspire Homes, this report

offers no solution or specific policy, in view of the Asian culture and deep-rooted bias

towards LGBT, especially in the elder generation.

CONCLUSION

Quality service results from

inspired and sustained leadership

throughout the organization. It

depends largely on corporate

culture, employees’ motivation

and use of effective IT systems.

Other than the six factors

discussed in the Designing and

Managing Services section, Aspire Homes needs to build a value-based culture in order to

succeed in bringing value to the old folks. This section is covered in the project

presentation. Extensive insights into issues and challenges are also reported. These are

most commonly ignored by marketers and business planners in building retirement villages.

Such issues have to be properly preplanned and policies in place within the community to

ensure a sustainable business and prevent negative impact to the Aspire Homes brand.

Lastly, providing quality service is an arduous and relentless task that requires top-down

alignment, reinventing service through creative destruction and tireless effective execution.

*****************************

Page 16 of 18
 Marketing Management – B6007
The Nanyang MBA

APPENDIX - BIBLIOGRAPHY

1. Active Community Unit, 1999, Giving Time, Getting Involved. Active Community Unit.
London.

2. Bennett DA, Schneider JA, Tang Y, Arnold SE, Wilson RS, 2006, “The effect of social
networks on the relation between Alzheimer's disease pathology and level of
cognitive function in old people: a longitudinal cohort study". Lancet Neurol 5 (5):
406–412. doi:10.1016/S1474-4422(06)70417-3. PMID 16632311.

3. Burholt, V. and Windle, G., 2001, Literature Review for the Strategy for Older People
in Wales: Health and Social Care for Older People. CSPRD, IMSCaR, University of
Wales, Bangor, UK.

4. Data360, http://www.data360.org/dataset.aspx?Data_Set_Id=795

5. Florian Coulmas, Routledge, 2007, POPULATION DECLINE AND AGEING IN

JAPAN: The Social Consequences.. London, New York. viii, 168pp.

6. Heywood, F., 2001, Money well spent. Policy Press, Bristol.

https://www.policypress.org.uk/

7. Hasnita A Majid, 2007, Government to create "silver industry" to help elderly stay
employable. Channel News Asia.
http://www.channelnewsasia.com/stories/singaporelocalnews/view/257949/1/.html

8. Hinchliff, A., 2005, Preparation of Report to WAG to Highlight Issues Around Older
Lesbian, Gay, Bisexual and Transgender (LGBT) People Facing the Need for Care
and Suggesting the ‘Best Practice’ Solutions.

9. Norman, D. (2004), Emotional Design: Why We Love (or Hate) Everyday Things,
Basic Books, New York, NY.

10. Susan Chira, 1982, New York Times’ article on “Retirement – Japanese Style”.
http://www.nytimes.com/1982/01/04/style/retirement-japanese-style.html

Page 17 of 18
 Marketing Management – B6007
The Nanyang MBA

APPENDIX - DEFINITIONS

1. Active Lifestyle - Live independently with an active lifestyle;

2. Independent Living - Continue living at home but need some help;

3. Congregate Living - In good health who want independence and companionship;

4. Assisted Living - Need help bathing, dressing, or other daily activities;

5. Continuing Care - Provide for aging health needs without having to relocate;

6. Nursing Care - Deteriorating mental and physical abilities;

7. Alzheimer’s Care - Seniors with Alzheimer's Disease;

8. Rehabilitation Care - Require rehabilitation services after a medical event.

Page 18 of 18