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Chapter 12

Income and Social Class

MKT 362 Buyer Behavior

Spring 2013

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Consumer Spending and

Economic Behavior

General economicconditions affect the way

we allocate our money

A person

s social classimpacts what he/she does

with money and how

consumption choices reflect

ones place in society

Products can be status

symbols

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Discretionary Income

The money available to a household over andabove what it requires to have a comfortable

standard of living

How we spend varies based in part on ourattitudes toward money

Tightwads

Spendthrifts

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Wal-Mart Study on

Attitudes Toward Money

Brand aspirationals

Price-sensitive affluents

Value-priced shoppers

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Consumer Confidence

Behavioral economics

Consumer confidence

Factors affecting the overall savings rate:

Pessimism/optimism about personal

circumstances

World events

Cultural differences in attitudes towardsavings

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Social Class Structure

Havesversus have-nots

Social class is determined by income, family

background, and occupation

Universal pecking order: relative standing insociety

Social class affects access to resources

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Picking a Pecking Order

Social stratification

Artificial divisions in a society

Scarce/valuable resources are distributed

unequally to status positions

Achieved versus ascribed status

Status hierarchy

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Social Mobility

Horizontal Mobility

Upward Mobility

Downward Mobility

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Figure 12.1 American Class Structure

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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 (top fifth controls 75% of all

assets)

How money is spent is more influential on

class than income

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Consumer View of Luxury Goods

Luxury is functional

Luxury is a reward

Luxury is indulgence

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Taste Cultures

Taste culture: differentiates people in termsof their aesthetic and intellectual preferences

Upper- and upper-middle-class: more likely

to visit museums and attend live theater Middle-class: more likely to go camping and

fishing

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Figure 12.2 Living Room

Clusters and Social Class

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Taste Cultures

Codes: the way consumers express andinterpret meanings

Allows marketers to communicate to markets

using concepts and terms consumers aremost likely to understand and appreciate

Restricted codes: focus on the content of

objects, not on relationships among objects

Elaborated codes: depend on a more

sophisticated worldview

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Status Symbols

What matters is having more wealth/famethan others

Status-seeking: motivation to obtain

products that will let others know that youhave made it

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Parody Display

Parody display:deliberately avoiding

status symbols

Examples: Ripped jeans

Sports utility

vehicles

Red Wing boots

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Problems with Social Class Segmentation

Ignores status inconsistencies

Ignores intergenerational mobility

Ignores subjective social class

Ignores consumers

aspirations to change

class standing

Ignores the social status of working wives