CBCH 13-Income n Social Class

8/11/2019 CBCH 13-Income n Social Class

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Chapter 13

Income and Social Class

By Michael R. Solomon

Consumer BehaviorBuying, Having, and Being

Sixth Edition



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• How would you describe Phil’s socialclass?

• Upon learning that the Caldwell’s “have

money,” what stereotypes did Phil haveabout families with high income?

• How did his experience with the Caldwellestate differ from his preconceptions?

• What lesson can we learn from Phil’sexperience?

Opening Vignette: Phil



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Consumer Spending

and Economic Behavior

• Status Symbo ls:

– 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 theworld 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 Spend ing

– 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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Consumer Confidence

• Behavioral Economics (a.k.a. economicpsychology): – 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



Social Class

• A Universal Pecking Order – Dominance-submission hierarchy: Each individual in the

hierarchy is submissive to those higher in the hierarchy andis 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



Social Class Affects Leisure

• This ad implies that there are social class differences in

leisure activities and preferred beverages.



Social Class Affects Lifestyle

http://www.palmbeachpolo.com/



Social Stratification

• Soc ial Strat if icat ion :

– 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 inwhich some members are better off than others



Achieved versus Ascribed Wealth

• In our society, wealth is more likely to be earned than

inherited.



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



American Class Structure

Figure 13.1



High Status of Golf in Japan

• Golf is a high status game in Japan, where land is

scarce and greens fees are extremely high.



Targeting Social Class

• This ad for US

Magazine uses a

strategy that relies on

cultural tastes ofconsumers in different

social classes.



Social Mobility

• Social Mob i l i ty: – 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 islower 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

• Occupat ional Prest ige: – 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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• Certain occupationshold prestige becauseof their worth tosociety. Others areprestigious becauseof power or income.

• Can you think ofprofessions that areprestigious but notnecessarily high inincome?

Discussion Question



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Measuring Social Class

• Problems w ith Measures o f 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 inconsistencyon the self and social behavior

• Overprivileged: Income is 25 to 30 percent greater than one’ssocial class median

• Underpri vileged: Income is 15 percent less than one’s social classmedian

– Hierogamy: Physically attractive women tend to “marry up”in social class



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Adapting to Social Status

• Lottery winners whoexperience sudden

wealth may have

trouble adapting to

their new social status.



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Measuring Social Class (cont.)

• Problems w ith Social Class

Segmentat ion : 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 and Codes

• Taste Cultu re: – Differentiates people in terms of aesthetic and intellectual

preferences

• Codes:

– The ways meanings are expressed and interpreted byconsumers

– Restricted codes: Focus on the content of objects, not therelationship between objects (dominant among working class)

– Elaborated codes: More complex and depend on a

sophisticated world view (used by middle and upper class)• Econom ic Capi tal: Financial Resources

• Soc ial Capital: Organizational affiliations andnetworks



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Taste Cultures

• People in the upper classes are more likely to share tastes in thearts as well. They spend relatively more of their leisure timeattending the symphony, museums, the theatre, and so on.



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Cultural Capital

• Cultu ral Capital : – A set of distinctive and socially rare tastes and

practices

• Habitus: – The way we classify experiences as a result of our

socialization processes

• Grid-gro up Theory:

– Model developed by anthropologist, Mary Douglas,that distinguishes between a person’s relationship tohis or her own social group and to the general socialsystem



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Theoretically Based Lifestyle Model

Figure 13.4



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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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Old and New Money

• Old Money:

– Families which live primarily on inherited funds

• The Nouveau Riches:

– Consumers who have achieved extreme wealth and

are relatively recent members of upper class

– Status anxiety: Concern that one is being consistent

with the cultural environment of being wealthy

– Symbolic self-completion: Excessive flamboyant

consumption to make up for insecurity



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Status Symbols

• Inv id ious dis t inct ion :

– Use of products to inspire envy in others through a display of

wealth or power

• Conspicuous consumpt ion:

– People’s desire to provide prominent visible evidence of theirability to afford luxury goods

• The B il lboard 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 greatlengths 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 foran armored-car maker uses an egg carton metaphor to

illustrate the security it offers.



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• 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 inthe box.

• What other brands can

you think of that have

such status, that the namecarries as much prestige

as the product?

Discussion Question



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Products as Status Symbols

http://www.jaguarusa.com/us



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Status Symbols (cont.)

• Parody Display:

– Sophisticated form of conspicuous consumption to

seek status by deliberately avoiding status symbols



Parody Display

• Ripped jeans (especially the pricey kind that come thatway when you buy them) are an example of a parody

di l

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