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Prentice-Hall, cr2009

Chapter 13Income and Social Class

CONSUMER

BEHAVIOR, 8eMichael Solomon

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Prentice-Hall, cr2009 Prentice-Hall, cr2009 213-2

Chapter Objectives

When you finish this chapter you should understandwhy:

Both personal and social conditions influence how wespend our money.

We group consumers into social classes that say a lotabout where they stand in society.

A persons desire to make a statement about hissocial class, or the class to which he hopes to belong,influences the products he likes and dislikes.

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Consumer Spending and EconomicBehavior

General economic conditionsaffect the way we allocate ourmoney

A persons social classimpacts what he/she doeswith money and on howconsumption choices reflectones place in society

Products can be status

symbols

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Income Patterns

The average Americansstandard of living continues toimprove due to:

An increase of women in theworkforce

Increases in educationalattainment

Discretionary income: money available to a householdover and above that required for a comfortable standardof living

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Individual Attitudes Toward Money

Wal-Mart study on how consumers think about moneyand brand names

Three distinct groups of consumers:

Brand aspirationals: people with low incomes who

are obsessed with names like KitchenAid; Price-sensitive affluents: wealthier shoppers who

love deals; and

Value-price shoppers: like low prices and cannotafford much more.

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Consumer Confidence

Behavioral economics: concerned with human sideof economic decisions

Consumer confidence: the extent to which people areoptimistic or pessimistic about the future health ofthe economy

Influences how much discretionary money we willpump into the economy

Overall savings rate is affected by:

Pessimism/optimism about personal

circumstances World events

Cultural differences in attitudes toward savings

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Social Class

Society is divided into the haves versus have-nots

Social class is determined by income, family background,and occupation

Universal pecking order: relative standing in society

Standing determines access to resources like education,housing, consumer goods

Marketing strategies focus on this desire to move up instanding

Social class affects access to resources

Social class: overall rank of people in a society Homogamy: we even tend to marry people in similar social

class

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Discussion

How do you assign people to social classes, or do youat all?

What consumption cues do you use (e.g., clothing,speech, cars, etc.) to determine social standing?

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Picking a Pecking Order

Social stratification: social arrangements in whichsome members get more resources than others byvirtue of relative standing, power, or control

Artificial divisions in a society

Scarce/valuable resources are distributedunequally to status positions

Achieved versus ascribed status

Status hierarchy

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Class Structure in the United States

Figure 13.1

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Class Structure Around the World

China: rise of middle class Japan: status- and brand-

conscious society

Arab cultures: women enjoy

shopping with theirfamilies/friends

U.K.: rigid class structure stillexists, but the dominance of its

aristocracy is fading Chavs: young, lower-class

men and women who mixflashy brands with track suits

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The Rise of Mass Class

Income distribution Affordable luxuries

within reach of manyconsumers

Rising incomes +decreasing prices

Marketers cater to massclass with high-qualityproducts

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Social Mobility

Social mobility: passage of individuals from onesocial class to another

Horizontal mobility (from one occupation toanother in same social class)

Downward mobility (Cinderella fantasy) Upward mobility

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Components of Social Class

Occupational prestige Is stable over time and similar across cultures

Single best indicator of social class

Income

Wealth not distributed evenly across classes (topfifth controls 75% of all assets)

Income is not often a good indicator of socialclass; its howmoney is spent

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Discussion

Which is a better predictor of consumer behavior: A consumers social class?

A consumers income?

Why?

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Relationship Between Income and SocialClass

Money and class not synonymous

Whether social class or income is a better predictor ofa consumers behavior depends on the type ofproduct:

Social class is better predictor of lower tomoderately priced symbolic purchases

Income is better predictor of majornonstatus/nonsymbolic expenditures

Need both social class and income to predictexpensive, symbolic products

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Measuring Social Class

Social class is complex and difficult to measure

Raw education and income measures work as well ascomposite status measures

Americans have little difficulty placing themselves in

working/middle classes Blue-collar workers with high-prestige jobs still view

themselves as working class

Class is very subjective; its meaning speaks to

self-identity as well as economic well-being

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Problems with Social Class Measures

Previously, measures of social class had troubleaccounting for two-income families, young singlesliving alone, or households headed by women

Overprivileged versus underprivileged conditions ofsocial class

Problems associated with lottery winners

Traditional issues of hierogamy

Women tend to marry up more than men do

Potential spouses social class as productattribute

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Class Differences in Worldview

World of working class is intimate and constricted Immediate needs dictate buying behavior

Dependence on relatives/local community

More likely to be conservative/family-oriented

Maintaining appearance of home/property

Dont feel high-status lifestyle is worth effort

Affluenza and pressure to maintain family status

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Discussion

Do you believe affluenza is a problem amongAmericans your age?

Why or why not?

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Taste Cultures

Taste culture: differentiates people in terms of theiraesthetic and intellectual preferences

Distinguishes consumption choices among socialclasses

Upper- and upper-middle-class: more likely to visitmuseums and attend live theater

Middle-class: more likely to go camping and fishing

Some think concept of taste culture is elitist

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Living Room Clusters and Social Class

Figure 13.3

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Taste Cultures (cont.)

Codes: the way consumers express and interpretmeanings

Allows marketers to communicate to markets usingconcepts and terms consumers are most likely tounderstand and appreciate

Restricted codes: focus on the content of objects, noton relationships among objects

Elaborated codes: depend on a more sophisticatedworldview

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Cultural Capital

Set of distinctive and sociallyrare tastes and practices

Refined behavior thatadmits a person into therealm of the upper class

Etiquette lessons anddebutante balls

Taste as a habitus thatcauses consumption

preferences to clustertogether

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Targeting the Poor

Poor people have the same basic needs as others Staples/food, health care, rent

Residents of poor neighborhoods must travel moreto have same access to supermarkets, banks, etc.

La Curacao department stores in California

Click photo for

lacuracao.com

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Targeting the Rich

Many marketers target affluent, upscale markets

Affluent consumers interests/spending priorities areaffected by where they got their money, how they gotit, and how long they have had it

Three different consumer attitudes toward luxury: Luxury is functional: use their money to buy things

that will last and have enduring value

Luxury is a reward: luxury goods to say, Ive madeit

Luxury is indulgence: are extremely lavish andself-indulgent

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Old Money

These types of familieslive on inherited funds

Family history of publicservice and philanthropy

Rockefeller University,Whitney Museum

Distinctions made byancestry and lineage

Click photo forRockefellaruniversity.com

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The Nouveau Riches

The working wealthyragsto riches

Newcomers to the worldof wealth

Status anxiety leading tosymbolic self-completion

Advertising emphasizeslooking the part

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Status Symbols

Keeping up with theJoneses/Satos

What matters is having morewealth/fame than others

Status-seeking: motivation toobtain products that will letothers know that you havemade it

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Status Symbols (cont.)

Status-symbol products vary across cultures andlocales

Brazil: owning a private helicopter to get aroundhorrible traffic

China: showing off pampered only child

Russia: cell phones with gems, expensive ties

Indonesia: retro cell phone the size of a brick

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Conspicuous Consumption

Invidious distinction: we buy things to inspire envyin others through our display of wealth or power

Conspicuous consumption: peoples desire toprovide prominent visible evidence of their ability toafford luxury goods

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The Trophy Wife

Leisure class and idle rich

Wives of wealthy husbands as walking billboards

Potlatch of Kwakiutl Indians

Modern-day lavish parties/weddings

Conspicuous waste

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Discussion

Thorstein Veblen argued thatwomen were often used astrophy wives to display theirhusbands wealth

Is this argument still valid today?

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Parody Display

Parody display:deliberately avoiding statussymbols

Examples:

Ripped jeans

Sports utility vehicles

Red Wing boots

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