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Chapter 12

Income and Social Class

CONSUMER BEHAVIOR, 9eMichael R. Solomon

Dr. Rika HoustonCSU-Los AngelesMKT 342: Consumer Behavior

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Consumer Spending and Economic Behavior

• General economic conditions

• A person’s social class

• Products as status symbols

• Consumer schizophrenia?

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Discretionary Income

• The money available to a household over and above what it requires to have a comfortable standard of living

• Attitudes toward money• Tightwads

• Spendthrifts

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Wal-Mart Study onAttitudes Toward Money

Brand Aspirationals

Price-Sensitive Affluents

Value-Priced Shoppers

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Consumer Confidence

• Behavioral economics

• Consumer confidence

• Factors affecting the overall savings rate:• Pessimism/optimism

• World events

• Cultural differences

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Social Class Structure

• “Haves” versus “have-nots”

• Determined by:• Income

• Occupation

• Education

• Family background

• Universal pecking order• relative standing in society

• Affects access to resources

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Determinants of Social Class Structure

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Social Stratification

• Creation of artificial divisions among people

• Distribution of scarce/valuable resources

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Picking a Pecking Order

• Distribution of scarce/valuable resources

• Based upon relative standing, power, or control

• Status hierarchy

• Achieved Status (by hard work)

• Ascribed Status (by who they are)

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Social Mobility

Horizontal Mobility

Upward Mobility

Downward Mobility

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Figure 12.1

American Class Structure

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Components of Social Class

• Occupational prestige• Stable over time

• Similar across cultures

• Single best indicator of social class

• Income• Wealth not distributed evenly across

classes (top fifth controls 75% of all assets)

• How money is spent means than income

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Predicting Consumer Behavior

• What predicts consumer behavior better? Social class or income?

• Well, it depends on the product!

• Social Class:• Moderately priced, symbolic purchases

• Income:• Major non-status/non-symbolic expenditures

• Social Class and Income:• Expensive, symbolic products

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Three Consumer Views of Luxury Goods

• Luxury is functional

• Luxury is a reward

• Luxury is indulgence

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Taste Cultures

• Differentiates people in terms of their aesthetic and intellectual preferences

• Upper- and upper-middle-class• Museums and live theater

• Middle-class• Camping and fishing

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Codes in Taste Cultures

• The way consumers express and interpret meanings

• Allows marketers to communicate to markets using concepts and terms consumers are most likely to understand and appreciate

• Restricted codes• focus on the content of objects, not on

relationships among objects

• Elaborated codes• depend on a more sophisticated worldview

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Status Symbols

• Status seeking (through consumption) is a global trend

• What matters is having more wealth/fame than others

• Lets others know that you have “made it”

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Parody Display

• Deliberately avoiding status symbols

• Examples:• Ripped jeans

• Sports utility vehicles

• Red Wing boots

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Problems with Social Class Segmentation

• Ignores status inconsistencies

• Ignores intergenerational mobility

• Ignores subjective social class

• Ignores consumers’ aspirations

• Ignores the social status of working wives

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Chapter 12: Income & Social ClassKey Concepts

• Discretionary income• Attitudes toward money• Consumer confidence• Determinants of social class structure• Social stratification• Achieved vs. ascribed status• Social mobility• American class structure• Components of social class structure• Consumer views of luxury goods• Taste cultures & codes of taste cultures• Status symbols• Parody display• Problems with social class segmentation