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Prentice-Hall, cr2009
Chapter 13Income and Social Class
CONSUMER
BEHAVIOR, 8eMichael Solomon
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Chapter Objectives
When you finish this chapter you should understandwhy:
Both personal and social conditions influence how wespend our money.
We group consumers into social classes that say a lotabout where they stand in society.
A persons desire to make a statement about hissocial class, or the class to which he hopes to belong,influences the products he likes and dislikes.
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Consumer Spending and EconomicBehavior
General economic conditionsaffect the way we allocate ourmoney
A persons social classimpacts what he/she doeswith money and on howconsumption choices reflectones place in society
Products can be status
symbols
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Income Patterns
The average Americansstandard of living continues toimprove due to:
An increase of women in theworkforce
Increases in educationalattainment
Discretionary income: money available to a householdover and above that required for a comfortable standardof living
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Individual Attitudes Toward Money
Wal-Mart study on how consumers think about moneyand brand names
Three distinct groups of consumers:
Brand aspirationals: people with low incomes who
are obsessed with names like KitchenAid; Price-sensitive affluents: wealthier shoppers who
love deals; and
Value-price shoppers: like low prices and cannotafford much more.
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Prentice-Hall, cr2009 Prentice-Hall, cr2009 613-6
Consumer Confidence
Behavioral economics: concerned with human sideof economic decisions
Consumer confidence: the extent to which people areoptimistic or pessimistic about the future health ofthe economy
Influences how much discretionary money we willpump into the economy
Overall savings rate is affected by:
Pessimism/optimism about personal
circumstances World events
Cultural differences in attitudes toward savings
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Prentice-Hall, cr2009 Prentice-Hall, cr2009 713-7
Social Class
Society is divided into the haves versus have-nots
Social class is determined by income, family background,and occupation
Universal pecking order: relative standing in society
Standing determines access to resources like education,housing, consumer goods
Marketing strategies focus on this desire to move up instanding
Social class affects access to resources
Social class: overall rank of people in a society Homogamy: we even tend to marry people in similar social
class
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Discussion
How do you assign people to social classes, or do youat all?
What consumption cues do you use (e.g., clothing,speech, cars, etc.) to determine social standing?
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Picking a Pecking Order
Social stratification: social arrangements in whichsome members get more resources than others byvirtue of relative standing, power, or control
Artificial divisions in a society
Scarce/valuable resources are distributedunequally to status positions
Achieved versus ascribed status
Status hierarchy
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Class Structure in the United States
Figure 13.1
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Prentice-Hall, cr2009 Prentice-Hall, cr2009 1113-11
Class Structure Around the World
China: rise of middle class Japan: status- and brand-
conscious society
Arab cultures: women enjoy
shopping with theirfamilies/friends
U.K.: rigid class structure stillexists, but the dominance of its
aristocracy is fading Chavs: young, lower-class
men and women who mixflashy brands with track suits
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The Rise of Mass Class
Income distribution Affordable luxuries
within reach of manyconsumers
Rising incomes +decreasing prices
Marketers cater to massclass with high-qualityproducts
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Social Mobility
Social mobility: passage of individuals from onesocial class to another
Horizontal mobility (from one occupation toanother in same social class)
Downward mobility (Cinderella fantasy) Upward mobility
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Components of Social Class
Occupational prestige Is stable over time and similar across cultures
Single best indicator of social class
Income
Wealth not distributed evenly across classes (topfifth controls 75% of all assets)
Income is not often a good indicator of socialclass; its howmoney is spent
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Discussion
Which is a better predictor of consumer behavior: A consumers social class?
A consumers income?
Why?
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Relationship Between Income and SocialClass
Money and class not synonymous
Whether social class or income is a better predictor ofa consumers behavior depends on the type ofproduct:
Social class is better predictor of lower tomoderately priced symbolic purchases
Income is better predictor of majornonstatus/nonsymbolic expenditures
Need both social class and income to predictexpensive, symbolic products
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Measuring Social Class
Social class is complex and difficult to measure
Raw education and income measures work as well ascomposite status measures
Americans have little difficulty placing themselves in
working/middle classes Blue-collar workers with high-prestige jobs still view
themselves as working class
Class is very subjective; its meaning speaks to
self-identity as well as economic well-being
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Problems with Social Class Measures
Previously, measures of social class had troubleaccounting for two-income families, young singlesliving alone, or households headed by women
Overprivileged versus underprivileged conditions ofsocial class
Problems associated with lottery winners
Traditional issues of hierogamy
Women tend to marry up more than men do
Potential spouses social class as productattribute
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Class Differences in Worldview
World of working class is intimate and constricted Immediate needs dictate buying behavior
Dependence on relatives/local community
More likely to be conservative/family-oriented
Maintaining appearance of home/property
Dont feel high-status lifestyle is worth effort
Affluenza and pressure to maintain family status
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Discussion
Do you believe affluenza is a problem amongAmericans your age?
Why or why not?
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Taste Cultures
Taste culture: differentiates people in terms of theiraesthetic and intellectual preferences
Distinguishes consumption choices among socialclasses
Upper- and upper-middle-class: more likely to visitmuseums and attend live theater
Middle-class: more likely to go camping and fishing
Some think concept of taste culture is elitist
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Living Room Clusters and Social Class
Figure 13.3
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Taste Cultures (cont.)
Codes: the way consumers express and interpretmeanings
Allows marketers to communicate to markets usingconcepts and terms consumers are most likely tounderstand and appreciate
Restricted codes: focus on the content of objects, noton relationships among objects
Elaborated codes: depend on a more sophisticatedworldview
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Cultural Capital
Set of distinctive and sociallyrare tastes and practices
Refined behavior thatadmits a person into therealm of the upper class
Etiquette lessons anddebutante balls
Taste as a habitus thatcauses consumption
preferences to clustertogether
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Targeting the Poor
Poor people have the same basic needs as others Staples/food, health care, rent
Residents of poor neighborhoods must travel moreto have same access to supermarkets, banks, etc.
La Curacao department stores in California
Click photo for
lacuracao.com
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Targeting the Rich
Many marketers target affluent, upscale markets
Affluent consumers interests/spending priorities areaffected by where they got their money, how they gotit, and how long they have had it
Three different consumer attitudes toward luxury: Luxury is functional: use their money to buy things
that will last and have enduring value
Luxury is a reward: luxury goods to say, Ive madeit
Luxury is indulgence: are extremely lavish andself-indulgent
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Old Money
These types of familieslive on inherited funds
Family history of publicservice and philanthropy
Rockefeller University,Whitney Museum
Distinctions made byancestry and lineage
Click photo forRockefellaruniversity.com
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The Nouveau Riches
The working wealthyragsto riches
Newcomers to the worldof wealth
Status anxiety leading tosymbolic self-completion
Advertising emphasizeslooking the part
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Status Symbols
Keeping up with theJoneses/Satos
What matters is having morewealth/fame than others
Status-seeking: motivation toobtain products that will letothers know that you havemade it
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Status Symbols (cont.)
Status-symbol products vary across cultures andlocales
Brazil: owning a private helicopter to get aroundhorrible traffic
China: showing off pampered only child
Russia: cell phones with gems, expensive ties
Indonesia: retro cell phone the size of a brick
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Conspicuous Consumption
Invidious distinction: we buy things to inspire envyin others through our display of wealth or power
Conspicuous consumption: peoples desire toprovide prominent visible evidence of their ability toafford luxury goods
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The Trophy Wife
Leisure class and idle rich
Wives of wealthy husbands as walking billboards
Potlatch of Kwakiutl Indians
Modern-day lavish parties/weddings
Conspicuous waste
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Discussion
Thorstein Veblen argued thatwomen were often used astrophy wives to display theirhusbands wealth
Is this argument still valid today?
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Parody Display
Parody display:deliberately avoiding statussymbols
Examples:
Ripped jeans
Sports utility vehicles
Red Wing boots