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Chapter 13 Income and Social Class


Sixth Edition Opening Vignette ... They have ignored consumers aspirations to change their class ... Arial Times New Roman Default Design Chapter 13 Income and ... – PowerPoint PPT presentation

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Title: Chapter 13 Income and Social Class

Chapter 13 Income and Social Class
By Michael R. Solomon
Consumer Behavior Buying, Having, and Being Sixth
Opening Vignette Phil
  • How would you describe Phils social class?
  • Upon learning that the Caldwells 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 Phils experience?

Consumer Spending and Economic Behavior
  • Status Symbols
  • Products that serve as markers of social class
  • Income Patterns
  • Womans 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

Luxury Items as Status Symbols
  • Luxury items like diamond engagement rings are
    valued as status symbols the world over, as this
    Brazilian ad for a jeweler reminds us.

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.

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
  • Aurophobia Fear of gold

Attitudes Toward Money
Consumer Confidence
  • Behavioral Economics (a.k.a. economic
  • Concerned with the human side of economic
  • 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

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 ones relationship to the means of
  • 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
  • Homogamy Tendency to marry into a similar social

Social Class Affects Leisure
  • This ad implies that there are social class
    differences in leisure activities and preferred

Social Class Affects Lifestyle
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
    which 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
  • Warners 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

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 of consumers in
    different social classes.

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
  • Differential fertility Middle class reproduce
    fewer children than lower class

Components of Social Class
  • Occupational Prestige
  • The worth of people based on what they do for a
  • Income
  • Distribution of wealth is important to marketers
    because it determines buying power and market
  • The Relationship Between Income and Social Class
  • Social class is a better predictor of purchases
    that have symbolic aspects but low to moderate
  • Income is a better predictor of major
    expenditures that do not have status or symbolic
  • Social class and income are both needed to
    predict purchases of expensive, symbolic products

Discussion Question
  • 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?

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
  • Status crystallization Assesses the impact of
    inconsistency on the self and social behavior
  • Overprivileged Income is 25 to 30 percent
    greater than ones social class median
  • Underprivileged Income is 15 percent less than
    ones social class median
  • Hierogamy Physically attractive women tend to
    marry up in social class

Adapting to Social Status
  • Lottery winners who experience sudden wealth may
    have trouble adapting to their new social status.

Measuring Social Class (cont.)
  • Problems with Social Class Segmentation A
  • 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

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
  • Depend more heavily on relatives for emotional
  • Orient themselves toward community rather than
    the world
  • More likely to be conservative and family
  • Affluenza Many well-off consumers seem to be
    stressed or unhappy despite their wealth

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
  • Social Capital Organizational affiliations and

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

Cultural Capital
  • Cultural Capital
  • A set of distinctive and socially rare tastes and
  • Habitus
  • The way we classify experiences as a result of
    our socialization processes
  • Grid-group Theory
  • Model developed by anthropologist, Mary Douglas,
    that distinguishes between a persons
    relationship to his or her own social group and
    to the general social system

Theoretically Based Lifestyle Model
Figure 13.4
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

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
  • Symbolic self-completion Excessive flamboyant
    consumption to make up for insecurity

Status Symbols
  • Invidious distinction
  • Use of products to inspire envy in others through
    a display of wealth or power
  • Conspicuous consumption
  • Peoples 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
  • Leisure class People for whom productive work is
  • Conspicuous waste Using up resources in
    nonconstructive pursuits

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 lengths to get one
    naturally or with help.

Status Symbols in Brazil
  • Armored cars are a status symbol in Brazil. This
    ad for an armored-car maker uses an egg carton
    metaphor to illustrate the security it offers.

Discussion Question
  • The ad to the left insinuates that because of the
    status of a gift from Tiffany and Co., it really
    doesnt 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?

Products as Status Symbols
Status Symbols (cont.)
  • Parody Display
  • Sophisticated form of conspicuous consumption to
    seek status by deliberately avoiding status

Parody Display
  • Ripped jeans (especially the pricey kind that
    come that way when you buy them) are an example
    of a parody display.