CHAPTER 11

Social Class and Consumer Behavior

LEARNING OBJECTIVES

After studying this chapter students should be able to:1. Distinguish between and define social class and social status.2. List and briefly discuss the variations in the number and types of social-class categories. 3. Explain the three broad measures of social class.4. Identify the single variable indexes that are used to measure social class.5. Discuss the use of composite-variable indexes to measure social class.6. Comment on social class profiles as a way of distinguishing between social classes.7. Articulate a definition of social mobility and its practical consequences for marketers.8. Explain geodemographic clustering and the service—PRIZM—that identifies factors

necessary for the clustering.9. Distinguish the affluent consumer and their importance to marketers.10. Describe the middle-class consumer and relevant marketing ramifications.11. Describe the downscale consumer and relevant marketing ramifications. 12. Describe the new techno class consumer and marketing strategies appropriate to reaching

him/her.13. Discuss several specific applications of social class information to consumer behavior.

CHAPTER SUMMARY

Social stratification, the division of members of a society into a hierarchy of distinct social classes, exists in all societies and cultures. Social class usually is defined by the amount of status that members of a specific class possess in relation to members of other classes. Social class membership often serves as a frame of reference (a reference group) for the development of consumer attitudes and behavior.

The measurement of social class is concerned with classifying individuals into social class groupings. These groupings are of particular value to marketers, who use social classification as an effective means of identifying and segmenting target markets. There are three basic methods for measuring social class: subjective measurement, reputational measurement, and objective measurement. Subjective measures rely on an individual’s self-perception; reputational measures rely on an individual’s perceptions of others; and objective measures use specific socioeconomic measures, either alone (as a single variable index) or in combination with others (as a composite-variable index). Composite-variable indexes, such as the Index of Status Characteristics and the Socioeconomic Status Score, combine a number of socioeconomic factors to form one overall measure of social class standing.

Class structures range from two-class to nine-class systems. A frequently used classification system consists of six classes: upper-upper, lower-upper, upper-middle, lower-middle, upper-

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lower, and lower-lower. Profiles of these classes indicate that the socioeconomic differences between classes are reflected in differences in attitudes, in leisure activities, and in consumption habits. This is why segmentation by social class is of special interest to marketers.

In recent years, some marketers have turned to geodemographic clustering as an alternative to a strict social class typology. Geodemographic clustering is a technique that combines geographic and socioeconomic factors to locate concentrations of consumers with particular characteristics. Particular attention currently is being directed to affluent consumers, who represent the fastest-growing segment in our population; however, some marketers are finding it extremely profitable to cater to the needs of nonaffluent consumers.

Research has revealed social class differences in clothing habits, home decoration, and leisure activities, as well as saving, spending, and credit habits. Thus, astute marketers tailor specific product and promotional strategies to each social-class target segment.

CHAPTER OUTLINE

INTRODUCTION

1. Some form of class structure or social stratification has existed in all societies throughout the history of human existence.

2. In contemporary societies, an indication of the presence of social classes is the common reality that people who are better educated or have more prestigious occupations like physicians and lawyers often are more highly valued than those who are truck drivers and farm hands. a) This is so, even though all four occupations are necessary for a society’s well-being. b) Moreover, a wide range of differences in values, attitudes, and behavior exists among

members of different social classes.

WHAT IS SOCIAL CLASS?

1. Although social class can be thought of as a continuum range of social positions on which each member of society can be placed, researchers have preferred to divide the continuum into a small number of specific social classes, or strata.

2. Social class is defined as the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status, and members of all other classes have either more or less status.

*****Use Key Term social class Here; Use Learning Objective #1 Here*****

Social Class and Social Status

1. Researchers define each social class by the amount of status (social status) the members of that class have in comparison to members of other social classes.

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2. In social class research (sometimes called social stratification), status is frequently thought of as the relative rankings of members of each social class in terms of specific status factors. Examples include:a) Relative wealth—amount of economic assets.b) Power—degree of personal choice.c) Prestige—the degree of recognition received from others.

3. To secure an understanding of how status operates within the minds of consumers, researchers have explored the idea of social comparison theory.a) The idea is that individuals quite normally compare their own material possessions with

those owned by others in order to determine their relative social standing.b) Status is often defined in terms of purchasing power.c) A related concept is status consumption—the process by which consumers endeavor to

increase their social standing through conspicuous consumption or possessions. 4. Other theories aside, status is often defined in terms of convenient demographic variables:

a) Family income.b) Occupational status.c) Educational attainment.

*****Use Key Term social status Here; Use Learning Objective #1 Here; Use Discussion Question #3 Here; Use Table 11-1 Here*****

Social Class is Hierarchical and a Natural Form of Segmentation

1. Social class categories are usually ranked in a hierarchy ranging from low to high status.a) Thus, members of a specific social class perceive members of other social classes as

having either more or less status than they do.b) Within this context, social class membership serves consumers as a frame of reference

(i.e., a reference group) for the development of their attitudes and behavior. 2. The hierarchical aspect of social class is important to marketers. 3. Consumers may purchase certain products because these products are favored by members of

their own or a higher social class (e.g., a fine French Champagne), and consumers may avoid other products because they perceive the products to be “lower-class” products (e.g., a digital readout wristwatch as a dress watch).

4. The classification of society’s members into a small number of social classes has also enabled researchers to note the existence of shared values, attitudes, and behavioral patterns among members within each social class and differing values, attitudes, and behavior between social classes.

Social Class Categories

1. Little agreement exists among sociologists on how many distinct class divisions are necessary to adequately describe the class structure of the United States. a) The choice of how many separate classes to use depends on the amount of detail that the

researcher believes is necessary to explain adequately the attitudes or behavior under study.

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2. Marketers are interested in the social class structures of communities that are potential markets for their products and in the specific social class level of their potential customers.

*****Use Learning Objective #2 Here; Use Table 11-2 and 11-3 Here; Use Figure 11-1 Here*****

THE MEASUREMENT OF SOCIAL CLASS

1. There is no general agreement as to how to measure social class.2. The result is a wide variety of measurement techniques, which may be classified into

subjective measures, reputational measures, and objective measures.

*****Use Key Terms subjective measures, reputational measures, and objective measures Here; Use Learning Objective #3 Here; Use Discussion Question #1 Here*****

Subjective Measures

1. In the subjective approach to measuring social class, individuals are asked to estimate their own social class positions.a) The resulting classification of social class membership is based on the participants’ self-

perceptions or self-images. b) Social class is treated as a “personal” phenomenon, one that reflects an individual’s

sense of belonging or identification with others. c) This feeling of social-group membership is often referred to as class consciousness.

2. Subjective measures of social class membership tend to produce an overabundance of people who classify themselves as middle class.a) Moreover, it is likely that the subjective perception of one’s social class membership, as

a reflection of one’s self-image, is related to product usage and consumption preferences.

*****Use Key Term class consciousness Here; Use Learning Objective #3 Here*****

Reputational Measures

1. In this form, selected community informants make initial judgments concerning the social class membership of others within the community, rather than themselves.a) This gives researchers a better understanding of the specific class structures of the

communities being studied.b) Consumer researchers, however, are more concerned with understanding markets and

consumers than social structure.c) This method is often considered impractical.

*****Use Learning Objective #3 Here*****

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Objective Measures

1. Objective measures consist of selected demographic or socioeconomic variables concerning the individual(s) under study. a) These are measured through questionnaires of factual questions.b) The most frequently used questions are about occupation, amount of income, and

education. c) Sometimes geodemographic data in the form of zip codes and residence-neighborhood

information is added.2. Socioeconomic measures of social class are important when segmenting the market.

Marketers match the socioeconomic profiles of their target audience with the audience profiles of selected media.

3. Marketing managers who have developed socioeconomic profiles of their target markets can locate these markets (i.e., identify and measure them) by studying the socioeconomic data periodically issued by the United States Bureau of the Census and numerous commercial geodemographic data services.

4. Socioeconomic audience profiles are regularly developed and routinely made available to potential advertisers by most of the mass media.a) These objective measures of social class fall into two basic categories, single variable

and composite variable.

*****Use Learning Objective #3 Here; Use Discussion Question #1 Here; Use Table 11-4 and 11-5 Here; Use Exercise #2 Here*****

Single-Variable Indexes

1. A single-variable index uses only one socioeconomic variable to evaluate social class membership. Four examples follow:a) Occupation—occupation is a widely accepted and probably the best documented

measure of social class, because it reflects occupational status. i) The importance of occupation as a social class indicator is dramatized by the

frequency with which people ask others they meet for the first time, “What do you do for a living?”

ii) More important, marketers frequently think in terms of specific occupations when defining a target market for their products.

iii) It appears that business executives and professionals who are self-employed or entrepreneurs are substantially more likely to be very wealthy than their counterparts who work for someone else.

*****Use Key Term single-variable index Here; Use Learning Objective #4 Here; Use Discussion Question #4 Here; Use Exercise #1 Here; Use Table 11-6 Here*****

b) Education—the level of a person’s formal education is another commonly accepted approximation of social class standing. i) Generally speaking, the more education a person has, the more likely it is that the

person is well paid.

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*****Use Learning Objective #4 Here; Use Discussion Question #4 Here; Use Table 11-7 Here*****

c) Income—researchers who favor income as a measure of social class use either amount or source of income. i) Although income is a popular estimate of social class standing, not all consumer

researchers agree that it is an appropriate index of social class. ii) Some argue that a blue-collar automobile mechanic and a white-collar assistant

bank manager may both earn $53,000 a year, yet because of (or as a reflection of) social class differences, each will spend that income in a different way.

iii) Further substantiating the importance of consumers’ personal values, rather than amount of income, is the observation that affluence may be more a function of attitude or behavior than of income level.

*****Use Learning Objective #4 Here; Use Discussion Question #2, #3, and #4 Here; Use Table 11-8 Here*****

d) Other Variables—quality of neighborhood and dollar value of residence are rarely used as sole measures of social class. i) They are, however, used informally to support or verify social class membership

assigned on the basis of occupational status or income.ii) Finally, possessions have been used by sociologists as an index of social class.

a) The best-known and most elaborate rating scheme for evaluating possessions is Chapin’s Social Status Scale, which focuses on the presence of certain items of furniture and accessories in the living room and the condition of the room.

*****Use Key Term Chapin’s Social Status Scale Here; Use Learning Objective #4 Here; Use Discussion Question #1 Here; Use Figure 11-2 Here*****

Composite-Variable Indexes

1. Composite-variable indexes systematically combine a number of socioeconomic variables to evaluate social class membership. a) They seem to better reflect social class complexity than single element indicators.

2. Two of the more important composite indexes are: a) Index of Status Characteristics—the Warner Index of Status Characteristics—(ISC)—

is a classic composite measure of social class that weighs occupation, source of income, house type, and dwelling area.

b) Socioeconomic Status Scores—the United States Bureau of Census developed the Socioeconomic Status Score (SES) that combines the socioeconomic variables of occupation, family income, and educational attainment.

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*****Use Key Terms composite-variable indexes, Index of Status Characteristics, and Socioeconomic Status Scores Here; Use Learning Objective #3 and #5 Here; Use Discussion Question #1 and #2 Here*****

LIFESTYLE PROFILES OF THE SOCIAL CLASSES

1. Consumer research has found evidence that within each of the social classes, there is a constellation of a specific lifestyle factors (shared beliefs, attitudes, activities, and behaviors) that distinguish members of a social class from members of other social classes.

2. People in any class may possess values, attitudes, and behavioral patterns that are a hybrid of two or more classes.

*****Use Learning Objective #6 Here; Use Exercise #2 and #3 Here; Use Table 11-9 Here*****

China: Pursuing a Middle-Class Lifestyle

1. In recent years, established marketers from all over the world have singled out China as a highly desirable growth market for their brands.

2. The wealthiest 20 percent of urban Chinese households (about 80 million) constitutes a highly attractive market.a) The “little rich” include those with about $3,200 in income.b) The “yuppies” include those with about $9,500 in income.c) The two middle-class segments tend to differ more in terms of their consumption

patterns than in terms of their attitudes, lifestyles and media behavior.

*****Use Table 11-10 and 11-11 Here*****

SOCIAL CLASS MOBILITY

1. Individuals can move either up or down in social class standing from the class position held by their parents.

2. Most Americans think of upward mobility. a) This results in the upper classes being the reference group for many ambitious men and

women in America.b) Recognizing these aspirations, marketers frequently incorporate higher-class symbols

into their advertising.3. Social class mobility also contributes to products and services filtering down from a higher

level to a lower one.

*****Use Key Term upward mobility Here; Use Learning Objective #7 Here; Use Figure 11-3 Here*****

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Some Signs of Downward Mobility

1. There are signs of some downward mobility. 2. Young adults will find it very difficult to “do better” than their parents, and may not do as

well as their mothers and fathers.

*****Use Key Term downward mobility Here; Use Learning Objective #7 Here*****

GEODEMOGRAPHIC CLUSTERING

1. Traditional social class measures have been enhanced by the linkage of geographic and socioeconomic consumer data to create more powerful geodemographic clusters.

2. One popular clustering service is PRIZM.a) This service assigns every one of the U.S. micro neighborhoods (zip + 4 areas) to one of

62 PRIZM clusters.b) These are collapsed into 15 groups.c) Marketers can superimpose these geodemographic clusters onto product and service

usage data, media exposure data, and lifestyle data to create a sharply defined picture of their target markets.

*****Use Key Terms geodemographic clusters and PRIZM Here; Use Learning Objective #8 Here; Use Discussion Question #5 Here; Use Table 11-12 and 11-13 Here*****

THE AFFLUENT CONSUMER

1. Affluent households are an attractive marketing target because of their disproportionately high amount of discretionary income.

2. For over 25 years, Mendelsohn Media Research has conducted an annual study of the affluent market—currently defined in terms of three affluent segments: a) Those with household incomes of $75,000 to $99,999 per year—the “least affluent.”b) Those with incomes of $100,000 to $199,999 per year—the “medium affluent.”c) Those with incomes of $200,000 or more per year—the “most affluent.”

3. Although the affluent market consists of only 25 percent of all households, this upscale market consumes more in several categories than the nonaffluent market.

4. The average household income for these consumers is $139,000, and 62 percent are employed in either a professional or managerial capacity.

5. Still further, a growing subcategory of the affluent are millionaires. a) Currently, more than 3 million American households have a net worth of more than $1

million.

*****Use Key Term affluent market Here; Use Learning Objective #9 Here; Use Discussion Question #6, #7, and #8 Here; Use Figure 11-4 and 11-5 Here*****

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The Media Exposure of the Affluent Consumer

1. Those homes with an income of more than $75,000 a year view less TV than less affluent households.

2. They read 6.1 different publications, listen to 12.5 hours of weekday radio, and watch 24.7 hours of TV per week. a) 92 percent subscribe to cable TV.

*****Use Learning Objective #9 Here; Use Discussion Question #8 Here; Use Table 11-5 (previously used) and 11-14 Here*****

Segmenting the Affluent Market

1. The affluent market is not one single market. a) Affluent consumers do not share the same lifestyles.

2. In an effort to isolate distinct segments, Mediamark Research, Inc. has developed the following affluent market-segmentation scheme for the Upper Deck consumers (the top 10 percent of households in terms of incomes):a) Well-feathered nests—households that have at least one high-income earner and

children present. (38 percent of the Upper Deck).b) No strings attached—households that have at least one high-income earner and no

children. (35 percent of the Upper Deck).c) Nanny’s in charge—households that have two or more earners, neither earning high

incomes, and children present. (9 percent of the Upper Deck).d) Two careers—households that have two or more earners, neither earning high incomes

and no children present. (11 percent of the Upper Deck).e) The good life—households that have a high degree of affluence with no person

employed, or with the head-of-household not employed. (7 percent of the Upper Deck)3. An untapped market is the rural affluent. Categories include:

a) Suburban transplants—those who move to the country but still commute to high-paying urban jobs.

b) Equity-rich suburban expatriates—sell homes for a huge profit, buy less expensive homes in small towns, live off the difference.

c) City folks with country homes—wealthy snowbirds and vacationers.d) Wealthy landowners—wealthy farmers and other natives who make a comfortable

living off the land.

*****Use Learning Objective #9 Here; Use Discussion Question #7 and #8 Here*****

MIDDLE-CLASS CONSUMERS

1. It is not easy to define the borders of what is meant by “middle class.”2. Though other measures are possible (such as those earning between $25,000 and $75,000)

the upper boundary of being middle class is about $85,000.

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3. For many marketers “middle class” can be thought of as including households that range from lower-middle to middle-middle class.

4. Because technological and luxury products are becoming more affordable to this class, it is even more difficult to define “middle class.”

5. There is mounting evidence that the “middle class” is disappearing in America.6. This is not true in other countries where the middle class is increasing.

*****Use Learning Objective #10 Here; Use Table 11-15 Here*****

THE WORKING CLASS AND OTHER NONAFFLUENT CONSUMERS

1. Although many marketers go after the affluent, the size and income of the nonaffluent group make them an important target market.

2. Lower-income, or downscale, consumers are households earning $30,000 or less.3. Downscale consumers are more brand loyal than wealthier consumers because they can less

afford to make mistakes in switching to unfamiliar brands.

*****Use Key Term downscale Here; Use Learning Objective #11 Here; Use Discussion Question #7 and #8 Here; Use Figure 11-4 and 11-5 Here*****

THE ARRIVAL OF THE "TECHNO-CLASS"

1. Techno is a new basis of class standinga) The degree of literacy, familiarity, and competency with technology, especially

computers and the Internet sets the standard for this class.2. Those who are unfamiliar or lack computer skills are being referred to as “technological

underclassed.”3. These extraordinary stories of entrepreneurial and technological accomplishments, when

coupled with a general sense of not wanting to be left out of the “sweep of computer technology” have propelled parents to seek out computer training for their children, even their infant children.

4. Fifty-five-year-old professionals, who were initially reluctant to “learn computers,” are now seeking “personal computer training.”

5. Consumers throughout the world have come to believe that it is critical to acquire a functional understanding of computers in order to ensure that they do not become obsolete, or hinder themselves socially or professionally.

6. It appears that those without necessary computer skills will increasingly find themselves to be “underclassed” and “disadvantaged.”

*****Use Learning Objective #12 Here*****

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The Geek Status

1. The increasingly positive image of geeks has made them and their lifestyles the target of marketers’ messages designed to appeal to their appetite for novel technological products.

*****Use Learning Objective #12 Here*****

SELECTED CONSUMER BEHAVIOR APPLICATIONS OF SOCIAL CLASS

Clothing, Fashion, and Shopping

1. Most people dress to fit their self-images, which include their perceptions of their own social class membership.

2. Members of specific social classes differ in terms of what they consider fashionable or in good taste. a) Lower middle-class consumers have a strong preference for T-shirts, caps, and other

clothing that offer an external point of identification.b) Upper-class consumers are likely to buy clothing that is free from such supporting

associations. i) Upper-class consumers also seek clothing with a more subtle look.

3. Social class is also an important variable in determining where a consumer shops.

*****Use Learning Objective #13 Here; Use Table 11-16 Here*****

The Pursuit of Leisure

1. Social class membership is also closely related to the choice of recreational and leisure-time activities. a) Upper-class consumers are likely to attend the theater and concerts, to play bridge, and

to attend college football games. b) Lower-class consumers tend to be avid television watchers and fishing enthusiasts, and

they enjoy drive-in movies and baseball games. 2. Over the past decade or so, however, a number of changes are increasingly being observed

that point to a further blurring of social-class lines with regard to leisure interests.

*****Use Learning Objective #13 Here; Use Figure 11-7 Here*****

Saving, Spending, and Credit

1. Saving, spending, and credit card usage all seem to be related to social class standing. 2. Upper-class consumers are more future-oriented and confident of their financial acumen;

they are more willing to invest in insurance, stocks, and real estate. 3. In comparison, lower-class consumers are generally more concerned with immediate

gratification; when they do save, they are primarily interested in safety and security.

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*****Use Learning Objective #13 Here*****

Social Class and Communication

1. Social class groupings differ in terms of their media habits and in how they transmit and receive communications.

2. When it comes to describing their world, lower-class consumers tend to portray it in rather personal and concrete terms, although middle-class consumers are able to describe their experiences from a number of different perspectives.

3. Such variations in response indicate that middle-class consumers have a broader or more general view of the world, although lower-class consumers tend to have a narrow or personal view, seeing the world through their own immediate experiences.

4. Regional differences in terminology, choice of words and phrases, and patterns of usage also tend to increase as we move down the social class ladder.

5. Selective exposure to various types of mass media differs by social class. a) Higher social class members tend to prefer current events and drama, although lower-

class individuals tend to prefer soap operas, quiz shows, and situation comedies. b) Higher-class consumers tend to have greater exposure to magazines and newspapers

than do their lower-class counterparts. c) Lower-class consumers are likely to have greater exposure to publications that

dramatize romance and the lifestyles of movie and television celebrities.

*****Use Learning Objective #13 Here***** Marketing researchers generally use the objective method to measure social class, rather than

the subjective or reputational methods. Why is the objective method preferred by researchers?

How would you use the research evidence on affluent households presented in this chapter to segment the market for: (a) home exercise equipment, (b) vacations, and (c) banking services?

How can a marketer use knowledge of consumer behavior to develop financial services for affluent consumers? For “"downscale"” consumers?

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