Transcript Chapter 1 Consumers Rule

Chapter 13
Income and Social Class
By Michael R. Solomon
Consumer Behavior
Buying, Having, and Being
Sixth Edition
13 - 1
Opening Vignette: Phil
• How would you describe Phil’s social class?
• Upon learning that the Caldwell’s “have
money,” what stereotypes did Phil have
about families with high income?
• How did his experience with the Caldwell
estate differ from his preconceptions?
• What lesson can we learn from Phil’s
experience?
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Consumer Spending
and Economic Behavior
• Status Symbols:
– Products that serve as markers of social class
• Income Patterns
– Woman’s Work
• More people participating in the labor force
• Mothers with children are the fastest growing
segment of working people
– Yes, It Pays to Go to School!
• Education is expensive but pays off in the long run
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Luxury Items as Status Symbols
• Luxury items like
diamond engagement
rings are valued as
status symbols the
world over, as this
Brazilian ad for a
jeweler reminds us.
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Education = A Higher Living Standard
• Education is strongly linked to a higher standard of living.
People who earn a college degree are likely to earn
much more during their lives than those who do not.
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To Spend or Not to Spend,
That is the Question
• Discretionary Spending
– Discretionary income: The money available to a
household over and above that required for a
comfortable standard of living
– Individual Attitudes Toward Money:
•
•
•
•
Atephobia: Fear of being ruined
Harpaxophobia: Fear of being robbed
Peniaphobia: Fear of poverty
Aurophobia: Fear of gold
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Attitudes Toward Money
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Consumer Confidence
• Behavioral Economics (a.k.a. economic
psychology):
– Concerned with the “human side” of economic decisions
• Consumer Confidence:
– Consumers’ beliefs about what the future holds
• Overall savings rate influenced by:
– (1) Individual consumers’ pessimism or optimism about
their personal circumstances
– (2) World events
– (3) Cultural differences in attitudes toward saving
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Social Class
• A Universal Pecking Order
– Dominance-submission hierarchy: Each individual in the
hierarchy is submissive to those higher in the hierarchy and
is dominant to those below them in the hierarchy
• Social Class Affects Access to Resources:
– Marx believed that position in society was determined by
one’s relationship to the means of production.
– Weber believed that rankings of people depended on
prestige (status groups), power (party) and wealth (class)
• Social Class Affects Taste and Lifestyles:
– Social class: The overall rank of people in a society
– Homogamy: Tendency to marry into a similar social class
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Social Class Affects Leisure
• This ad implies that there are social class differences in
leisure activities and preferred beverages.
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Social Class Affects Lifestyle
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Social Stratification
• Social Stratification:
– Creation of artificial divisions in a society
• Achieved Versus Ascribed Status:
– Achieved status: Status earned through hard work
or diligent study
– Ascribed status: Status one is born with
– Status hierarchy: Structure in a social group in
which some members are better off than others
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Achieved versus Ascribed Wealth
• In our society, wealth is more likely to be earned than
inherited.
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Class Structure
• Class Structure in the United States:
– Warner’s six social classes:
•
•
•
•
•
•
(1) Upper Upper
(2) Lower Upper
(3) Upper Middle
(4) Lower Middle
(5) Upper Lower
(6) Lower Lower
• Class Structure Around the World:
– Every society has some type of hierarchical class
structure
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American Class Structure
Figure 13.1
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High Status of Golf in Japan
• Golf is a high status game in Japan, where land is
scarce and greens fees are extremely high.
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Targeting Social Class
• This ad for US
Magazine uses a
strategy that relies on
cultural tastes of
consumers in different
social classes.
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Social Mobility
• Social Mobility:
– The passage of individuals from one social class to another
• Horizontal Mobility:
– Movement from one position to another roughly equivalent
in social status
• Downward Mobility:
– Movement from one position to another position that is
lower in social status
• Upward Mobility:
– Movement from one position to another position that is
higher in social status
– Differential fertility: Middle class reproduce fewer children
than lower class
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Components of Social Class
• Occupational Prestige:
– The “worth” of people based on what they do for a living
• Income:
– Distribution of wealth is important to marketers because it
determines buying power and market potential
• The Relationship Between Income and Social
Class:
– Social class is a better predictor of purchases that have
symbolic aspects but low to moderate price
– Income is a better predictor of major expenditures that do
not have status or symbolic aspects
– Social class and income are both needed to predict
purchases of expensive, symbolic products
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Discussion Question
• Certain occupations
hold prestige because
of their worth to
society. Others are
prestigious because
of power or income.
• Can you think of
professions that are
prestigious but not
necessarily high in
income?
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Measuring Social Class
• Problems with Measures of Social Class:
– Dated measures which are no longer valid
– Increasing anonymity of society
• Reputational method: Extensive interviews within a community to
determine reputations of individuals
– Status crystallization: Assesses the impact of inconsistency on
the self and social behavior
• Overprivileged: Income is 25 to 30 percent greater than one’s social
class median
• Underprivileged: Income is 15 percent less than one’s social class
median
– Hierogamy: Physically attractive women tend to “marry up”
in social class
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Adapting to Social Status
• Lottery winners who
experience sudden
wealth may have
trouble adapting to
their new social status.
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Measuring Social Class (cont.)
• Problems with Social Class
Segmentation: A Summary:
–
–
–
–
They have ignored status inconsistency.
They have ignored intergenerational mobility.
They have ignored subjective social class.
They have ignored consumers’ aspirations to change
their class standing.
– The have ignored the social status of working wives.
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How Social Class
Affects Purchase Decisions
• Class Differences in Worldview
– A major social class difference involves the worldview
of consumers
• Working class:
–
–
–
–
More focused on immediate needs than long-term goals
Depend more heavily on relatives for emotional support
Orient themselves toward community rather than the world
More likely to be conservative and family oriented
– Affluenza: Many well-off consumers seem to be
stressed or unhappy despite their wealth
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Taste Cultures
• People in the upper classes are more likely to share tastes in the
arts as well. They spend relatively more of their leisure time
attending the symphony, museums, the theatre, and so on.
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Targeting the Poor and Rich
• Targeting the Poor:
– Most marketers ignore this segment
• Targeting the Rich:
– Segmenting consumers based on their attitudes
toward luxury:
• (1) Luxury is functional
• (2) Luxury is a reward
• (3) Luxury is indulgence
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Status Symbols
• Invidious distinction:
– Use of products to inspire envy in others through a display of
wealth or power
• Conspicuous consumption:
– People’s desire to provide prominent visible evidence of their
ability to afford luxury goods
• The Billboard Wife:
– The decorative role women play when showered with
expensive clothes
– Leisure class: People for whom productive work is taboo
– Conspicuous waste: Using up resources in nonconstructive
pursuits
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Status Symbols are Always in Flux
• At one time, having very
pale skin was the mark of
an upper social class
because it indicated that
the person did not have to
work in the fields. Today, a
suntan is equated with
leisure time and
consumers go to great
lengths to get one naturally
or with “help.”
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Status Symbols in Brazil
• Armored cars are a status symbol in Brazil. This ad for
an armored-car maker uses an egg carton metaphor to
illustrate the security it offers.
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Discussion Question
• The ad to the left
insinuates that because of
the status of a gift from
Tiffany and Co., it really
doesn’t matter what is in
the box.
• What other brands can
you think of that have
such status, that the name
carries as much prestige
as the product?
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Products as Status Symbols
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Status Symbols (cont.)
• Parody Display:
– Sophisticated form of conspicuous consumption to
seek status by deliberately avoiding status symbols
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Parody Display
• Ripped jeans (especially the pricey kind that come that
way when you buy them) are an example of a parody
display.
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