Chapter 11 Social Class and Consumer Behavior

Social Class The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes © 2000 Prentice Hall

Social Class and Social Status • Social status is usually defined in terms of one or more of the following socioeconomic variables: – Family Income – Occupational Status – Educational Attainment © 2000 Prentice Hall

Table 11. 1 Variations in the Number and Types of Social-Class Categories TWO-CATEGORY SOCIAL CLASS SCHEMAS • Blue-collar, white-collar • Lower, upper • Lower, middle THREE-CATEGORY SOCIAL CLASS SCHEMAS • Blue-collar, gray-class, white-collar • Lower, middle, upper FOUR-CATEGORY SOCIAL CLASS SCHEMAS • Lower, lower-middle, upper FIVE-CATEGORY SOCIAL CLASS SCHEMAS • Lower, working-class, lower-middle, upper • Lower, lower-middle, upper-middle, upper © 2000 Prentice Hall

Table 11. 1 continued SIX-CATEGORY SOCIAL CLASS SCHEMAS • Lower-lower, upper-lower, lower-middle, upper-middle, lowerupper, upper-upper SEVEN-CATEGORY SOCIAL CLASS SCHEMAS • Real lower-lower, a lower group of people but not the lowest, working class, middle class, upper-middle, lower-upper, upper-upper NINE-CATEGORY SOCIAL CLASS SCHEMAS • Lower-lower, middle-lower, upper-lower, lower-middle, upper-middle, lower-upper, middle-upper, upper-upper © 2000 Prentice Hall

Table 11. 2 Percent Distribution of Five. Category Social-Class Measure SOCIAL CLASSES Upper-middle Middle

The Measurement of Social Class • Subjective Measures • Reputational Measures • Objective Measures

Subjective Measures In the subjective approach to measuring social class, individuals are asked to

Reputational Measures The reputational approach requires selected community informants to make initial judgments concerning the social-class membership of others within the community. © 2000 Prentice Hall

Objective Measures of Social Class A method of measuring social class whereby individuals are asked specific socioeconomic questions concerning themselves or their families On the basis of their answers, people are placed within specific socialclass groupings. © 2000 Prentice Hall

Objective Measures • Single-variable indexes – Occupation – Education – Income – Other Variables • Composite-variable indexes – Index of Status Characteristics – Socioeconomic Status Score © 2000 Prentice Hall

Single. Variable Index The use of a single socioeconomic variable (such as income) to

Chapin’s Social Status Scale A social class rating scheme that focuses on the presence

Composite. Variable Index An index that combines a number of socioeconomic variables (such as

Index of Status Characteristics (ISC) A composite measure of social class that combines occupation, source of income (not amount), house type and dwelling area into a single weighted index of social class standing. Also known as Warner’s ISC. © 2000 Prentice Hall

Socioeconomic Status Score (SES) A multivariable social class measure used by the United States Bureau of the Census that combines occupational status, family income, and educational attainment into a single measure of social class standing. © 2000 Prentice Hall

Table 11. 3 Readers’ Median Household Income for Selected Publications NEWSPAPER/MAGAZINE Wall Street Journal Barron’s New York Times Daily Architectural Digest Forbes Money PC World New Yorker Smithsonian Newsweek Time Car & Driver National Geographic MEDIAN HOUSEHOLD INCOME $86, 109. 4 83, 075. 5 78, 093. 1 71, 483. 6 68, 518. 7 64, 423. 2 60, 680. 4 59, 471. 0 55, 5646 54, 842. 2 52, 283. 5 52, 338. 0 49, 561. 4 © 2000 Prentice Hall

Table 11. 3 continued NEWSPAPER/MAGAZINE People Town & Country Esquire Cosmopolitan Playboy Field & Stream Outdoor Life Hunting Family Circle Soap Opera Weekly Ebony True Story MEDIAN HOUSEHOLD INCOME $48, 206. 4 47, 810. 3 45, 565. 4 42, 937. 8 39, 759. 1 39, 164. 8 38, 765. 6 38, 299. 9 39, 476. 5 28, 583. 8 27, 744. 8 17, 426. 1 © 2000 Prentice Hall

Table 11. 4 Occupational Rankings in Terms of Honesty and Ethical Standards OCCUPATIONAL 1997 RANK COMBINED PERCENT* Druggists/pharmacists 1 69% Clergy 2 59 Medical doctors 3 56 College teachers 4 55 Dentists 5 54 Police officers 6 49 Engineers 7 49 Funeral directors 8 36 Bankers 9 34 Public opinion pollsters 10 23 Journalists 11 23 TV reporters, commentators 12 22 © 2000 Prentice Hall

Table 11. 4 continued OCCUPATIONAL 1997 RANK COMBINED PERCENT* Business executives 13 20 Local officeholders 14 20 Building contractors 15 20 Newspaper reporters 16 19 Stockbrokers 17 18 State officeholders 18 17 Real estate agents 19 16 Lawyers 20 15 Labor union leaders 21 15 Senators 22 14 Advertising practitioners 23 12 Congresspeople Insurance salespeople 24 25 12 12 Car salespeople 26 8 *Rank is based on the combination of “very high” and “high” rating. © 2000 Prentice Hall

Table 11. 5 The Relationship between Formal Education and Household Income TOTAL NO MORE THAN ELEM. SCHOOL HIGH SCHOOL GRAD. 1 TO 3 YEARS OF COLL. 4+ YEARS OF COLL. SOME HIGH SCHOOL 100% 100% 11. 7 31. 9 24. 4 11. 4 8. 3 3. 3 $10, 000 to $14, 999 8. 5 18. 0 16. 0 9. 1 6. 8 3. 3 $15, 000 to $24, 999 15. 5 22. 0 23. 3 18. 2 14. 5 7. 5 $25, 000 to $34, 999 14. 0 12. 0 13. 3 16. 9 15. 1 10. 3 $35, 000 to $74, 999 17. 6 5. 6 7. 5 16. 9 21. 2 23. 2 $75, 000 and Over 15. 6 2. 1 3. 3 8. 7 14. 3 35. 2 94, 364 8, 062 9, 683 29, 507 23, 670 23, 424 $35, 235 $15, 043 $18, 298 $31, 376 $39, 637 $58, 052 ALL HOUSEHOLDS Under $10, 000 Households (000’s) Median income © 2000 Prentice Hall

Table 11. 6 Typical Categories Used for Assessing Amount or Source of Income AMOUNT OF INCOME Under $25, 000 per year $25, 000 to $49, 999 $50, 000 to $74, 999 $75, 000 to $99, 999 $100, 000 to $124, 999 $125, 000 to $149, 999 $150, 000 to $174, 999 $175, 000 to $199, 999 $200, 000 and over SOURCE OF INCOME Public welfare Private financial assistance Wages (hourly) Salary (yearly) Profits or fee Earned wealth Inherited wealth, interest, dividends, royalties © 2000 Prentice Hall

Table 11. 7 Social-Class Profiles THE UPPER-UPPER CLASS--COUNTRY CLUB ESTABLISHMENT • Small number of well-established families • Belong to best country clubs and sponsor major charity events • Serves as trustees for local colleges and hospitals • Prominent physicians and lawyers • May be heads of major financial institutions, owners of major longestablished 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 © 2000 Prentice Hall

Table 11. 7 continued THE UPPER-MIDDLE CLASS--ACHIEVING PROFESSIONALS • Have neither family status nor unusual wealth • Career-oriented • Young successful professionals, corporate managers, and business 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 swerve as symbols of their achievements • Consumption is often conspicuous • Very child-oriented © 2000 Prentice Hall

Table 11. 7 continued THE LOWER-MIDDLE CLASS--FAITHFUL FOLLOWERS • Primary nonmanagerial white-collar workers and highly paid bluecollar workers • Want to achieve “respectability” and be accepted as good citizens • 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 faddish or highlystyled clothing • Constitute a major market for do-it-yourself products © 2000 Prentice Hall

Table 11. 7 continued THE UPPER-LOWER CLASS--SECURITY-MINDED MAJORITY • The largest social-class segment • Solidly blue-collar • Strive for security (sometimes gained from union membership) • 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 their leisure time (e. g. , TV sets) • Husbands typically have a strong “macho” self-image • Males are sports fans, heavy smokers, beer drinkers 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 © 2000 Prentice Hall

Geodemographic Clusters A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods, or blocks) and demographic variables (e. g. , income, occupation, value of residence) to identify target markets. © 2000 Prentice Hall

PRIZM (Potential Rating Index by Zip Market) A composite index of geographic and socioeconomic factors expressed in residential zip code neighborhoods from which geodemographic consumer segments are formed. © 2000 Prentice Hall

Table 11. 9 A Profile of PRIZM Cluster: “Young Literati” (Cluster 08) SOCIOECONOMIC FACTORS: Percent of U. S. households Predominant age range Socioeconomic group Demographic caption Housing type Education Occupation 0. 94% 25 -34, 35 -44 Upper middle Upscale urban singles and couples Renter College graduates Professional LIFESTYLE: Plan for large purchases Take vitamins Use a discount-broker Watch Bravo Read GQ © 2000 Prentice Hall

Figure 11. 4 Three Segments of Affluent Consumers’ Average Household Expenditures (among purchasing households)

Figure 11. 5 Affluent Consumers’ Participation in Selected Sports © 2000 Prentice Hall

Table 11. 10 Affluent Readers’ ($70, 000+ Median Household Income) for Selected Publications NEWSPAPER/MAGAZINE Allure Architectural Digest Art & Antiques Better Homes and Gardens Boating Bon Appetit Business Week Cigar Aficionado Conde Nast Traveler Elle Esquire Fortune Golf Magazine Good Housekeeping MEDIAN HOUSEHOLD INCOME ($) 115, 400 125, 400 103, 200 96, 600 101, 400 119, 200 121, 500 115, 100 123, 500 119, 900 108, 200 121, 900 102, 200 94, 800 © 2000 Prentice Hall

Table 11. 10 continued NEWSPAPER/MAGAZINE Gourmet GQ/Gentlemen’s Quarterly House & Garden Martha Stewart Living National Geographic Newsweek Self Southern Accents Town & Country Travel & Leisure U. S. News & World Report Vanity Fair Vogue W MEDIAN HOUSEHOLD INCOME ($) 120, 600 103, 500 100, 300 100, 000 97, 000 109, 000 103, 800 120, 800 124, 200 111, 100 99, 900 124, 700 119, 800 138, 000 © 2000 Prentice Hall

MRI Affluent Market-Segmentation Schema • Affluent Segments – – – Well-feathered Nests No Strings Attached Nanny’s In Charge Two Careers The Good Life • Rural Affluent Segments – Suburban Transplants – Equity-rich Suburban Expatriates – City Folks with Country Homes – Wealthy Landowners © 2000 Prentice Hall