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Chapter 11

Consumer Behavior,Consumer Behavior,Eighth EditionEighth Edition

SCHIFFMAN & KANUK

Social Class and ConsumerBehavior

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Social ClassSocial Class

The division ofmembers of a society

into a hierarchy ofdistinct status classes,

so that members ofeach class have eitherhigher or lower statusthan members of other

classes.

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Social Class and Social Status

• Status is frequently thought of as therelative rankings of members of each socialclass– wealth– power– prestige

Social Comparison Theorystates that individuals

compare theirown possessions against those

of others to determine theirrelative social standing.

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Status Consumption

The process by which consumers activelyincrease their social standing throughconspicuous consumption or possessions

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Convenient Approaches toSocial Class

• Social status is usually defined in terms ofone or more of the following socioeconomicvariables:– Family Income– Occupational Status– Educational Attainment

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Figure 11.1TargetingUpscale

Customers

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Table 11.3 Percent Distribution of Five-Category Social-Class Measure

SOCIAL CLASSES PERCENTAGEUpper 4.3Upper-middle 13.8Middle 32.8Working 32.3Lower 16.8Total percentage 100.0

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Social Class Measurement

• Subjective Measures: individuals are askedto estimate their own social-class positions

• Reputational Measures: informants makejudgments concerning the social-classmembership of others within the community

• Objective Measures: individuals answerspecific socioeconomic questions and thenare categorized according to answers

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Objective Measures

• Single-variableindexes– Occupation– Education– Income– Other Variables

• Composite-variableindexes– Index of Status

Characteristics– Socioeconomic Status

Score

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Table 11.5 Readers’ Median HouseholdIncome for Selected Publications

NEWSPAPER/MAGAZINENEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOMEMEDIAN HOUSEHOLD INCOMEWall Street Journal $86,109.4Barron’s 83,075.5New York Times Daily 78,093.1Architectural Digest 71,483.6Forbes 68,518.7Money 64,423.2PC World 60,680.4New Yorker 59,471.0Smithsonian 55,5646Newsweek 54,842.2Time 52,283.5Car & Driver 52,338.0National Geographic 49,561.4

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Table 11.8 Amount and Source ofIncome Categories

Amount– Under $25,000/ year

– $25,000-$49,999

– $50,000-$74,999

– $75,000-$99,999

– $100,000-$124,999

– $125,000-$149,999

– $150,000-$174,999

– $175,000-$199,999

– $200,000 and over

Source– Public welfare

– Private financialassistance

– Wages (hourly)

– Salary (yearly)

– Profits or fees

– Earned wealth

– Inherited wealth, interest,dividends, royalties

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Figure 11.2Targeting

Upper-classConsumers

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Index of StatusIndex of StatusCharacteristicsCharacteristics

(ISC)(ISC)

A compositemeasure of social

class that combinesoccupation, source

of income (notamount), house type/ dwelling area intoa single weighted

index of social classstanding.

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SocioeconomicSocioeconomicStatus ScoreStatus Score

(SES)(SES)

A multivariable socialclass measure used by

the United StatesBureau of the Census

that combinesoccupational status,family income, and

educational attainmentinto a single measure of

social class standing.

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Table 11.9 Social-Class ProfilesTHE UPPER-UPPER CLASS--COUNTRY CLUB•Small number of well-established families•Belong to best country clubs and sponsor major charity events•Serve as trustees for local colleges and hospitals•Prominent physicians and lawyers•May be heads of major financial institutions, owners of majorlong-established firms

•Accustomed to wealth, so do not spend money conspicuously

THE LOWER-UPPER CLASS--NEW WEALTH•Not quite accepted by the upper crust of society•Represent “new money”•Successful business executive•Conspicuous users of their new wealth

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Table 11.9 continued

THE UPPER-MIDDLE CLASS--ACHIEVINGPROFESSIONALS

•Have neither family status nor unusual wealth•Career oriented•Young, successful professionals, corporate managers, andbusiness owners

•Most are college graduates, many with advanced degrees•Active in professional, community, and social activities•Have a keen interest in obtaining the “better things in life”•Their homes serve as symbols of their achievements•Consumption is often conspicuous•Very child oriented

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Table 11.9 continued

THE LOWER-MIDDLE CLASS--FAITHFULFOLLOWERS

•Primary non-managerial white-collar workers and highly paidblue-collar workers

•Want to achieve “respectability” and be accepted as goodcitizens

•Want their children to be well behaved•Tend to be churchgoers and are often involved in church-sponsored activities

•Prefer a neat and clean appearance and tend to avoid faddishor highly-styled clothing

•Constitute a major market for do-it-yourself products

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Table 11.9 continuedTHE UPPER-LOWER CLASS--SECURITY-MINDEDMAJORITY

•The largest social-class segment•Solidly blue-collar•Strive for security•View work as a means to “buy” enjoyment•Want children to behave properly•High wage earners in this group may spend impulsively•Interested in items that enhance leisure time (e.g., TV sets)•Husbands typically have a strong “macho” self-image•Males are sports fans, heavy smokers, beer drinkers

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Table 11.9 continued

THE LOWER-LOWER CLASS--ROCK BOTTOM•Poorly educated, unskilled laborers•Often out of work•Children are often poorly treated•Tend to live a day-to-day existence

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Figure 11.3Appealing to

UpwardMobility

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GeodemographicGeodemographicClustersClusters

A compositesegmentation

strategy that usesboth geographic

variables (zip codes,neighborhoods) and

demographicvariables (e.g.,

income, occupation)to identify target

markets.

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PRIZMPRIZM(Potential(Potential

Rating IndexRating Indexby Zipby Zip

Market)Market)

A composite index ofgeographic and

socioeconomic factorsexpressed in

residential zip codeneighborhoods from

whichgeodemographic

consumer segmentsare formed.

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Table 11.13 A Profile of PRIZM Cluster:“Urban Gold Coast” (Cluster 06)

SOCIOECONOMIC FACTORS:

Percent of U.S. households 0.60%Predominant age range MixedSocioeconomic group AffluentDemographic caption Professional urban singles and couplesEducation College graduatesOccupation White collarRace/Ethnicity White, Asian

LIFESTYLE:

Use WebTV onlineListen to Oldie GoldiesRead New York MagazineWatch Politically Incorrect

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Table 11.14 Affluent Readers’ ($70,000+ MedianHousehold Income) for Selected Publications

NEWSPAPER/MAGAZINENEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOME ($)MEDIAN HOUSEHOLD INCOME ($)Allure 115,400Architectural Digest 125,400Art & Antiques 103,200Better Homes and Gardens 96,600Boating 101,400Bon Appetit 119,200Business Week 121,500Cigar Aficionado 115,100Conde Nast Traveler 123,500Elle 119,900Esquire 108,200Fortune 121,900Golf Magazine 102,200

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MRI Affluent Market-Segmentation Schema

• Affluent Segments– Well-feathered Nests– No Strings Attached– Nanny’s In Charge– Two Careers– The Good Life

• Rural AffluentSegments– Suburban Transplants– Equity-rich Suburban

Expatriates– City Folks with Country

Homes– Wealthy Landowners

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What is Middle Class?• The “middle” 50% of household incomes -

households earning between $25,000 and $85,000

• Households made up of college-educated adultswho use computers, and are involved in children’seducation

• Lower-middle to middle-middle based on income,education, and occupation (this view does NOTinclude upper-middle which is consideredaffluent)

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What is Working Class?

• Households earning $34,000 or less controlmore than 30% of the total income in theU.S.

• These consumers tend to be more brandloyal than wealthier consumers

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Consumer Behavior andSocial Class

• Clothing, Fashion, and Shopping• The Pursuit of Leisure• Saving, Spending, and Credit• Social Class and Communication