solomon13.ppt 2910KB Sep 01 2008 12:34:08 AM

(1)

Chapter 13

Income and Social Class

By Michael R. Solomon

(2)

•

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?

(3)

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!}

(4)

Luxury Items as Status Symbols

• _{Luxury items like}

diamond engagement rings are valued as

(5)

Education = A Higher Living Standard

(6)

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

(7)

(8)

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

(9)

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

(10)

Social Class Affects Leisure

(11)

(12)

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}

(13)

(14)

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}

(15)

[image:15.720.54.675.97.483.2]

(16)

High Status of Golf in Japan

(17)

Targeting Social Class

• _{This ad for US}

Magazine uses a

strategy that relies on cultural tastes of

(18)

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

(19)

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

(20)

• 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?

(21)

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

(22)

Adapting to Social Status

• _{Lottery winners who}

experience sudden wealth may have trouble adapting to

(23)

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.

(24)

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

(25)

Taste Cultures and Codes

• _{Taste Culture:}

– Differentiates people in terms of aesthetic and intellectual preferences

• _Codes:

– _{The ways meanings are expressed and interpreted by}

consumers

– Restricted codes: Focus on the content of objects, not the

relationship between objects (dominant among working class)

– Elaborated codes: More complex and depend on a

sophisticated world view (used by middle and upper class) • _{Economic Capital:}_{Financial Resources}

(26)

Taste Cultures

(27)

Cultural Capital

•

Cultural 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-group Theory:

– _{Model developed by anthropologist, Mary Douglas,}

(28)

[image:28.720.42.692.98.473.2]

(29)

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

(30)

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}

(31)

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

(32)

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

(33)

(34)

• 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?

(35)

(36)

Status Symbols (cont.)

•

Parody Display:

– _{Sophisticated form of conspicuous consumption to}

(37)