CHAPTER FOUR The Changing American Society: Demographics and Social StratificationMcGraw-Hill/IrwinCopyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

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Demographics Describe a population in terms of its size, distribution, and structure.

Population SizeDistribution

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A Tale of Three Cities

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Demographics: Occupation

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Demographics: Education

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Demographics: IncomeEnables but does not generally cause or explain themWhat is wealth?Subjective Discretionary IncomeTotal Family Income

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Demographics: Age18-24 25-34 35-44 45-54 55-64 65+

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Consumer Insight 4-1Cognitive age is measured on four dimensions. What additional dimensions, if any, do you think should be added?Do you think cognitive age is a valid concept? Why?If the meaning of age is a cultural concept, how would the concept and measurement of cognitive age change across cultures?How can marketers use cognitive age?

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Consumer Insight 4-2The percentage of the American population that is elderly is going to increase dramatically over the next 20 years. How is this going to change the nature of American society?What ethical and social responsibilities do marketers have when marketing to the elderly?

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Generations/Age CohortsGeneration/Age Cohort: a group of persons who have experienced a common social, political, historical, and economic environmentCohort Analysis: the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors

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Understanding American GenerationsPre-depression (Before 1930)Depression (1930 to 1945)Baby Boom (1945 to 1964)Generation X (1965 to 1976)Generation Y (1977 to 1994)Millennials (After 1994)

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Social Standing Influences Behavior

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The Coleman-Rainwater Social Class Hierarchy

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The Coleman-Rainwater Social Class Hierarchy

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Upward-Pull Strategy

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Group ExerciseForm a group of four peopleDevelop a scale of measurement for social status

Be able to answer the following:Single-Item or Multi-Item?What is the main effect (most important factor)of the index?What are the strengths and weaknesses?What products or services would be the best application of your index?

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Measuring Social StatusSingle-Item IndexesEducationOccupation (Socioeconomic Index: SEI)IncomeRelative Occupational Class IncomeSubjective Discretionary Income

Multi-Item IndexesHollingshead Index of Social PositionWarners Index of Status CharacteristicsCensus Bureaus Index of Socioeconomic Status

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Hollingshead Index of Social Position (ISP)Occupation Scale (Weight of 7)DescriptionScore

Higher executives of large concerns, proprietors, and 1 major professionalsBusiness managers, proprietors of medium-sized businesses, 2 and lesser professionalsAdministrative personnel, owners of small businesses, and 3 minor professionalsClerical and sales workers, technicians, and owners of little 4 businessesSkilled manual employees5Machine operators and semiskilled employees6Unskilled employees7

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Hollingshead Index of Social Position (ISP)Education Scale (Weight of 4)DescriptionScore

Professional (MA, MS, ME, MD, PhD, LLD, and the like)1Four-year college graduate (BA, BS, BM)2One to three years college (also business schools)3High school graduate4Ten to 11 years of school (part high school)5Seven to nine years of school6Less than seven years of school7

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Hollingshead Index of Social Position (ISP)ISP score = (Occupation score X 7) + (Education score X 4)Classification System Range ofDescriptionScoresUpper 11-17Upper-middle 18-31Middle 32-47Lower-middle 48-63Lower 64-77

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Warners Index of Status Characteristics (ISC)1 Professionals and pro-InheritedExcellent Very high: Gold Coast, prietors of large businesses wealth houses North Shore, etc. 2 Semiprofessionals & Earned Very good High: better suburbs & officials of large businesseswealth apartment house areas 3 Clerks and kindred Profits & Good houses Above average: areas all residential, workers fees space around houses, apartments in good condition

4 Skilled workers Salary Average Average: residential neighborhoods, houses no deterioration

5 Proprietors of small Wages Fair houses Below average: area beginning to businesses deteriorate, business entering

6 Semiskilled workers Private relief Poor houses Low: considerably deteriorated, run down and semi-slum

7 Unskilled workers Public relief & Very poor Very low: slumnonrespectable housesincome Characteristics Score Source ofHouseOccupationIncomeTypeDwelling Area

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Warners Index of Status Characteristics (ISC)Upper-upper12-17 1.4%Lower-upper18-24 1.6Upper-middle 25-37 10.2Lower-middle 38-50 28.8Upper-lower 51-62 33.0Lower-lower 63-84 25.5Classification SystemRange ofPopulationSocial StrataScores BreakdownISC score = (Occupation X 4) + (Income source X 3) + (House type X 3) + (Dwelling area X 2)

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Census Bureau Index of Socioeconomic Status (SES)

Under $3,000 15Some grade school 10Laborers 20$3,000-$4,999 31 Grade school graduate 23 Students 33$5,000-$7,999 62 Some high school 42 Service workers 34$8,000-$9,999 84 High school graduate 67 Operators 58$10,000-$14,999 94 Some college 86Craftsmen 58$15,000-$19,999 97 College graduate 93 Clerical sales 71$20,000-$29,999 99 Graduate school 98 Managers 81$30,000 and over 100 Professionals 90

*Note: Income levels should be adjusted by consumer price index before using.Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15 (Washington, D.C.: U.S. Government Printing Office, 1963).IncomeEducation OccupationCategory*ScoreCategory Score Category Score

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Census Bureau Index of Socioeconomic Status (SES)(Income) + (Education) + (Occupation)SES score = 3Upper90-9915.1%Upper-middle 80-8934.5Middle45-7934.1Lower-middle 0-4416.3

*Note: Income levels should be adjusted by consumer price index before using.Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15(Washington, D.C.: U.S. Government Printing Office, 1963).Classification SystemRange ofPopulationSocial StrataScores Breakdown

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Using Social ClassChoosing the best measureWill a single-item index be accurate enough?What is the underlying factor I should be concerned with?

Issues and AssumptionsUpward Social MobilityClass ConsciousnessDated social-class measures

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Positioning and Social Class Segments

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Perceived Social Class Appeal

BlockBuster Video: Store Type

Does the measure capture an important asp[ect I am focusing on?