Transcript Chapter 1

Chapter 13
Social Class
Social Class
Snapshot from the Marketplace
The English aristocracy remains one of the
backbones of the British society.
One-third of British aristocracy are honored with
noble titles such as Sir, Lord, or Knight.
Many aristocrats live in old castles adorned with
furniture that is inherited.
They are attached to their for-men-only clubs,
where staff upholds old traditions with great
pride.
Q. 1. Define Social Class.
What are Social Classes?
Overall ranks assigned to groups of people
living in a society.
These ranks are based on the values held by
that specific society.
Q. 2. Define Stratification.
Social Stratification
Social Stratification: the act of classifying
members of a society based on their
economic and social standing
Social stratification provides one basis that
marketers use for segmentation purposes.
Q. 3. What factors obscure the
recognition of social class in the
United States?
U.S. Consumers and Social Class
Class distinctions in the United States are
subtle due to:
Egalitarianism: feelings of equality among
people
Size of middle class: most people feel they
belong to the middle class
Mobility: movement on the social ladder
Income inconsistency with status: class and
income are not well correlated
Why Learn About Social Class?
The presence of certain shared values and
behavioral patterns among members of each
social class enables marketers to use
geodemographic segmentation.
Databases are developed to identify clusters of
consumers with shared characteristics.
Marketers then design promotional messages
precisely calibrated to each social class needs.
Such segmentation technique eliminates
nonproductive reach of promotional messages.
Q. 4. What are the different
types of social class structure in
the United States?
Multi-Tiered Social Class Structure in the
United States
The Upper Class (1 percent)
The Middle Class (40 percent)
The Working Class (44 percent)
The Under Class (15 percent)
The Evolving Social Class Structure
of the United States
The 2011 Annual World Wealth Report states that:
There were 3.1 million millionaires in the United States.
Their combined wealth exceeded $11.6 trillion.
On the other hand, the U.S. Census Bureau states
that in 2011:
There were around 47 million Americans (over 15
percent) living in poverty.
There were around 21 million Americans whose cash
income was less than half of the poverty line.
Social Class and the Net
In 2012, 66 percent of online adults used social
network sites.
Individuals under 30 years of age are significantly
more likely to be users compared with adult age
categories.
Education, household income, and racial identity
are significant factors affecting social media use.
Hispanics are at the top of the user list of social
networks, followed by Blacks and then Whites.
Implications of Evolving
Social Class Trends
Effects occur on both the where to shop and
what to purchase.
Notable increase in the percentage of
consumers who shop at dollar stores, discount
supercenters, warehouse stores, and thrift shops.
Companies apply a strategy of attracting
customers on both sides of the income divide
with an upstairs-downstairs (Tiffany &
Co./Walmart) approach.
How Are Social Classes Evolving?
The income share of the wealthiest segment has
significantly risen.
The income share of the middle class continues to
shrink due to the economic downturn, high
unemployment rate, and payroll cuts.
Many in the working class lack job security and
have minimal protection from falling into poverty
conditions.
For the underclass, the poverty rate continues to
rise.
Q. 5. What are the three
methods od measuring social
class?
Methods of Measuring Social Class
Subjective measures: respondents classify
themselves on the social ladder
Reputational measures: individuals in a group rank
others’ social-standing
Objective measures: class membership is based
on assessing one or more demographic and/or
socioeconomic variables
Methods of Measuring Social Class
(cont’d)
Objective investigations of social class
employ one of two methods:
Single-variable indexes: the researcher uses a
single indicator of class membership such as
occupation or income to assess class standing
Composite-variable indexes: the researcher
uses a weighted average of several socioeconomic measures to calculate an overall
index of a person’s class standing
Q. 6. What are some issues
relevant to the social class
structure in the United States?
Relevant Issues to Social Class
The changing class stature of women:
Women now constitute 60 percent of college
students and earn the majority of doctorate and
master’s degrees.
They now fill the majority of jobs in the United
States, including 52 percent of managerial and
professional positions.
4 in 10 working wives out-earn their husbands.
Women are marrying later, tend to have fewer
children, and give birth to their first child later in
life.
Relevant Issues to Social Class (cont’d)
Social Class versus Income:
People tend to casually equate earnings with
social class.
Class and income are not very well correlated.
For marketers, social class is generally a better
predictor than income alone for most consumer
purchases.
Relevant Issues to Social Class (cont’d)
Status crystallization versus incongruity:
Status crystallization is the extent to which our
social-status indicators (e.g., income, possessions,
education) coincide with one another.
Marketers are interested in pinpointing
incongruities—exceptions to the phenomenon of
status crystallization.
Relevant Issues to Social Class (cont’d)
The overprivileged and underprivileged:
In every social class exists households whose
incomes either exceed or fall below the median
for that class.
Purchases of life’s niceties are not restricted to the
upper social class.
Such items are bought by the overprivileged in
every social class.
Relevant Issues to Social Class (cont’d)
Social mobility:
More than in any other country, the United States
exhibits an open-class system.
Due to recent changing economic and financial
conditions, the movement upward and downward
on the social ladder are more prevalent in our
society today.
Impact of Social Class on Consumer Behavior
Social class standing often influences various
aspects of consumer behavior, including:
Types, quantities, and qualities of acquired products
Choice of where to shop
Preference for store brands versus national brands
Choice of recreational activities
Saving, investing, and spending patterns
Credit use
Online and offline media habits
These observed differences have ramifications
for marketers and advertisers.