SOCIAL CLASS &

CONSUMER BEHAVIOR

Social ClassSocial ClassSocial Class may be defined as the relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior can be grouped.

Social class is determined by:1. Occupation2. Income Level3. Heritage4. Educational attainment5. Possessions6. Associations or interactions 7. Level of Influence

Social Class Affects Access to Resources

Marx believed that position in society was determined by one’s relationship to the means of production.

Weber believed that rankings of people depended on prestige (status groups), power (party) and wealth (class)

Social Class Influence Social classSocial class represents an interesting way to look

at a market; influenced by such factors as education, occupation, and place of residence.

May be used as a basis for segmenting markets, and may reflect the aspirations of consumers.

Social classes exist whether people care to admit it or not; differences in beliefs and attitudes exist across class boundaries; and social class may be a better predictor of buyer behaviour than income.

3 Types of Social Influence

Conformity: a change in behavior to match the responses/actions of others (with no pressure necessarily).

Compliance: a change in behavior in response to a direct request.

Obedience: a change in behavior in response to a direct order from an authority figure.

Components of Social Class

Occupational Prestige: The “worth” of people based on what they do for a living

Income: Distribution of wealth is important to marketers because it

determines buying power and market potentialThe Relationship Between Income and Social Class:

Social class is a better predictor of purchases that have symbolic aspects but low to moderate price

Income is a better predictor of major expenditures that do not have status or symbolic aspects

Social class and income are both needed to predict purchases of expensive, symbolic products

Social Standing Influences Behavior

The Consumption Patterns of Specific Social Classes The Upper Class

The Middle Class White collar

The Working Class Blue collar

The Homeless Scavenging

The Social Class System

The UpperClass(2%)

• The Upper (Old Money)• The Lower (New Rich)

The Middle Class(45%)

• The Upper (12%)• Moderately successful business people, professionals

• The Lower (32%)•White collar workers, technicians, small business owners

The LowerClass(54%)

•The Upper (38%)•Blue collar (working class)

•The Lower (16%)•Unskilled, chronically unemployed, welfare poor

Advertisements Appealing to Different Classes

Advertisement Catering to Different Classes contd…

Advertisements Appealing to Different Classes Contd…

Contd..

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.

Upward-Pull Strategy

Examples of mobility

Horizontal Mobility

Mobility

Upward mobility

Upward Shift

A good example can be the Maruti 800 Ad camp. Of Rs 2599 which appeals to all the two wheelers and the lower middle class people , who are looking for an upward mobility in Status moving from a scooter to a Car

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 individuals

Status crystallization: Assesses the impact of inconsistency on the self and social behaviorOverprivileged: Income is 25 to 30 percent greater than

one’s social class medianUnderprivileged: Income is 15 percent less than one’s

social class medianHierogamy: Physically attractive trend to “marry up”

Measuring Social Class (cont.)

Problems with Social Class Segmentation: A Summary: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

wives.

Income & Social Class

Overprivileged: Income is 25 to 30 percent greater than one’s social class median

Underprivileged: Income is 15 percent less than one’s social class median

ConsumptionSocial class better predictor of symbolic purchases with low

to moderate priceIncome better predictor of major expenditures that do not

have status or symbolic aspectsSocial class and income are both needed to predict purchases

of expensive, symbolic products

Income

.

Ability toBuy

Willingness to Buy

Consumer Demand

Market Potential

Discretionary income

The money available to a household over and above that required for a comfortable standard of living

Sociocultural InfluencesSociocultural InfluencesSociocultural influences, which evolve from a consumer’s formal and informal relationships withother people, can exert significant impact on consumerbehaviour. Sociocultural influences include:1. Personal influence2. Reference groups3. The Family4. Social Class5. Culture6. Subculture

BUYING-DECISION PROCESS

Need recognition

Identification of alternatives

Evaluation of alternatives

Purchase and related decisions

Postpurchase behaviour

INFORMATION

Commercialsources

Social sources

SITUATIONALFACTORSWhen consumers buyWhereconsumers buy

Why consumers buyConditions under whichconsumers buy

PSYCHOLOGICAL FORCESMotivationPerceptionLearningPersonalityAttitude

SOCIAL ANDGROUP FORCESCultureSubcultureSocial classReference groupsFamily and households

Copyright © 2000 McGraw Hill Ryerson Limited

Lifestyle & VALSLifestyle & VALSLifestyle is a mode of living that is identified by howpeople spend their time and resources (activities),

what they consider important in their environment(interests), and what they think of themselves and theworld around them (opinions).

Lifestyle analysis focuses on identifying consumerprofiles. The most prominent example of this type ofanalysis is the Values and Lifestyles (VALS) Programdeveloped by SRI International.

Social Stratification

Social Stratification:The artificial divisions of society “by which scarce and

valuable resources are distributed unequally to status positions that become more or less permanent” partly as a result of the distribution system itself.

Hegemonic processHow those currently in power distribute resources to stay in

power 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

Class Consciousness:May play a role ina firm’s operations

Social StratificationTypically defined by family background,

occupation, and income.Class:

some social mobilityCaste:

Virtually no mobility

It is the artificial division of society “by which scarce and valuable resources are distributed unequally to status positions, that become more or less permanent” partly as a result of the distribution system itself

Social Stratification

Functional Necessity of Stratification

In order to function, society must:

Motivate the proper members for proper positions

Motivate the persons filling these positions to do the required duties

Motivation is often based on rewards

Functional Necessity of Stratification

Types of rewards include:

things that contribute to SustenanceSustenance and ComfortComfort

things that contribute to HumorHumor and DiversionDiversionthings that contribute to Self-respectSelf-respect and Ego-Ego-

expansionexpansion

The differential distribution of those awards according to position are part of the social order and give rise to stratification

Nature of Social Class

It is a group consisting of a number of people who have approximately equal positions in a society

These positions may be

Ascribed, or inheritedAchieved, or earned

Characteristics of Social Class

A. Social Classes Exhibit Status Status refers to one’s rank in the social system, as

perceived by other members of the society

An individual’s status is a function of: social class to which he belongs personal characteristics, for example

scientist – employed in a prestigious research institute – earning Rs 2 lakh p.a.

scientist – employed by a small firm – earning Rs 75K p.a.

Characteristics of Social Class

personal contributions to society –– for example, a scientist discovering a breakthrough in laser technology

Factors Important in Determining Status are: Power Income Occupation Education Ancestry

Authority over others Ownership of Property Consumption Patterns

& Lifestyle Public Service Association

Characteristics of Social Class

B. Social Classes are Multidimensional

They are multidimensional, being based on numerous components

Income Occupation Housing

Characteristics of Social Class

C. Social Classes are Hierarchical

They have a vertical order to them, ranging from high status to low status

They exist as a position on the social scale

Individuals may be placed within a class on this hierarchy, based on status criteria

Characteristics of Social Class

D. Social Classes Restrict Behaviour

Interaction between the classes is limited because Most people are comfortable and find

reinforcement with people having similar values, lifestyles, educational backgrounds, occupations, income levels, and behaviour patterns

Members of the same social class tend to associate with each other, and to a lesser extent with members from other classes

Characteristics of Social Class

E. Social Classes are Homogeneous

They may be viewed as homogeneous divisions of society in which people within a class have similar attitudes, activities, interests, etc.

This homogeneity allows the marketers to predict that groups of people are exposed to similar media purchase similar products & services shop in similar stores

Characteristics of Social Class

F. Social Classes are Dynamic Social stratification systems in which people have some

opportunity for upward or downward movement are ‘Open Systems’ People in such systems have Achieved status

Social stratification systems in which people have either no opportunity for movement, or they are unable to leave are ‘Closed Systems’ People in such systems have Ascribed status

It occurs whenever people move across the social class boundaries, perhaps in their own life time or through generations, or from one occupational level to another

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

Inter-Generational Mobility: compares parents’ levels to that of their children

Social Mobility

In medieval society, Feudal and Caste societies were ‘closed’ - a person's position was largely based on ascribed characteristics (such as family origin, or ethnic group)

For example,Brahmin – teachers & priestsKshatriya – warriors & rulersVaisya – land owners & merchantsSudra – artisans & servants

such as potters, barbers, carpenters, leatherworkers, butchers, launderers, etc

Untouchables – Harijans or Dalits

Indian Society – ‘ Then ’

In today’s changing society, the caste inequalities exist and to some extent these ascribed characteristics are still socially significant

The classification is now done in three broad categories : Upper, Middle, Lower Classes

But in modern India greater emphasis is placed on Achievement, i.e. what people can do

This has paved a way for two more segments:

Working ClassTechno Class

Indian Society – ‘ Today ’

A] Working Class

More focused on immediate needs than long-term goals

Depend more heavily on relatives for emotional support

Orient themselves toward community rather than the world

More likely to be conservative and family oriented

B] Techno Class

Such structure centers around the amount of computer skills that a person possesses. Those who lack necessary computer skills find themselves to be “underclassedunderclassed” and “disadvantageddisadvantaged”

Degree of literacyliteracy, familiarityfamiliarity, and competencycompetency with technology, especially computers and the Internet, appears to be a new basis for a kind of “class class standingstanding”, or status or prestige

. . .

Consumers throughout the world believe that it is criticalcritical to acquire a functional understanding of computers in order to ensure that they do not become obsolete or hinder themselves socially or socially or professionallyprofessionally

Parents in all social-class groupings are seeking out early computer exposure for their children

At the other end of the life and age spectrum (i.e. 55-yr-old & above), professionals who were initially reluctant to learn computers, are now seeking personal computer training

Gadgets like iPods, camera phones and portable DVD players are must-have fashion accessories for kids, teens, and adults

Social Class Structure

Five–Category Social ClassesFive–Category Social Classes

Upper

Upper-Middle

Middle

Lower-Middle

Lower

Social Class Structure

Nine–Category Social ClassesNine–Category Social Classes

Upper-UpperUpper-MiddleUpper-Lower

Middle-UpperMiddle-MiddleMiddle-Lower

Lower-UpperLower-MiddleLower-Lower

Coleman and Rainwater Approach

Social-Psychological Approach :

based on personal and group prestigereflects how people interact with one another – as

equals, superiors, or inferiors

Class Identification

is influenced most heavily by educational educational credentials and occupationcredentials and occupation (including income as its success measure)

but, ultimately relates to a person’s social circle of person’s social circle of acceptanceacceptance

Upper-Lower

Upper-Middle

Middle

Working Class

Lower

Lower-Lower

Upper-Upper old family names

accepted new money

collegiate credentials expected

white-collar associations

blue-collar life style

below the mainstream

the welfare world

Coleman-Rainwater View

India follows a 5-Tier System

Consumer Group

Very RichConsuming ClassClimbersAspirantsDestitute

Annual Income

2,15,0002,15,000–45,000

45,000-25,00025,000-16,000

16,000 & Below

As per National Council of Applied Economic Research’s report, based on a national population that was estimated to be 900 million, it was revealed that

Very Rich, consist of about 6 millionConsuming Class, about 150 million people

(17%) and is expected to triple, reaching 450 million people by 2010

Climbers, about 275 million people (30%)Aspirants, about 275 million (30%)Destitute, estimated to be 210 million (23%)

Growing Indian Middle Class

Measurement of Social Class

Three Kinds of Measurement:

Subjective Measure – Based on the self perception

Reputational Measure – Based on consumption and behavior

Objective Measure – Based on demographic and socio-economic variables

Variables

Occupation IncomeEducationManners and styleOwnershipPoliticalPrestigeGenealogy

SocialClass

OccupationEducation Income Residence

Age of Head(s) of Household

Household Structure

Prestige Association Values

Operationalizing Household

Operationalizing Household Social Class

SocialClass

OccupationEducation Income Residence

Age of Head(s) of HouseholdHousehold Structure

Prestige Association Values

Social Structure

MobileManagers

Hard toBuild

Teams

Lackof

Loyalty

Entrepreneurship

Individual

Western

Lack ofEntrepreneurship

LifetimeEmployment

Identity

Group

Eastern

NonmobileManagers

Grouptwo or more individuals

with a shared sense of identity

Every Society

U.S.A.Embarrassed about it, ideal is equality & meritocracyIntergenerational mobility limited but possible

Western Europe: vestiges of aristocracy Central and South America

More dichotomized (2% control 95%) hegemony breaks down instability

Japan: Very hierarchical, large middle class

India: Caste system

China: “Classless”

Class vs. Caste

Achieved Versus Ascribed Status: Achieved status: Status earned through hard work or diligent study Ascribed status: Status one is born with

Social Mobility: 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 statusDifferential fertility: Middle class reproduce less than

replacement value, allowing for upward mobility

India

A Caste SystemOccupation & MarriageBrahmin: teachers & priestsKshatriya: warriorsVaisya: merchantsSudra: dirty work

CASTE IN INDIABasis is kinshipAssociated occupationClearly separated, self-regulating groupsNo individual mobility in one lifetimeNo intercaste marriageReligious interpretation ranked by purity

Occupations and Class

All three dimensions of social stratification: class, status and authority are reflected in a person’s occupation.

Different occupations have different relations to the means of economic production…

Different levels of social status…And different levels of authority to

command.

CLASSBasis is economic: income, occupationAssociated lifestyleMobility is possible: downward and upward Interclass marriage is possibleClass at birth affects life chances: ability to fulfill one’s

potentialPersons in the same class more likely to associate with

each other, intermarry, have similar hobbies, tastes, political views

American mythology: open class system where all have equal opportunity to succeed