Chapter 12 Income and Social Class

1. Chapter 12Income and Social Class CONSUMER BEHAVIOR, 9eMichael R. Solomon Dr. Rika Houston CSU-Los Angeles MKT 342: Consumer Behavior

2. Consumer Spending and Economic Behavior • General economic conditions • A person’s social class • Products as status symbols • Consumer schizophrenia?

3. Discretionary Income • The money available to a household over and above what it requires to have a comfortable standard of living • Attitudes toward money • Tightwads • Spendthrifts

4. Wal-Mart Study onAttitudes Toward Money Brand Aspirationals Price-Sensitive Affluents Value-Priced Shoppers

5. Consumer Confidence • Behavioral economics • Consumer confidence • Factors affecting the overall savings rate: • Pessimism/optimism • World events • Cultural differences

6. Social Class Structure • “Haves” versus “have-nots” • Determined by: • Income • Occupation • Education • Family background • Universal pecking order • relative standing in society • Affects access to resources

7. Determinants of Social Class Structure

8. Social Stratification • Creation of artificial divisions among people • Distribution of scarce/valuable resources

9. Picking a Pecking Order • Distribution of scarce/valuable resources • Based upon relative standing, power, or control • Status hierarchy • Achieved Status (by hard work) • Ascribed Status (by who they are)

10. Social Mobility Horizontal Mobility Upward Mobility Downward Mobility

11. Figure 12.1 American Class Structure

12. Components of Social Class • Occupational prestige • Stable over time • 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 means than income

13. Predicting Consumer Behavior • What predicts consumer behavior better? Social class or income? • Well, it depends on the product! • Social Class: • Moderately priced, symbolic purchases • Income: • Major non-status/non-symbolic expenditures • Social Class and Income: • Expensive, symbolic products

14. Three Consumer Views of Luxury Goods • Luxury is functional • Luxury is a reward • Luxury is indulgence

15. Taste Cultures • Differentiates people in terms of their aesthetic and intellectual preferences • Upper- and upper-middle-class • Museums and live theater • Middle-class • Camping and fishing

16. Codes in Taste Cultures • The way consumers express and interpret meanings • Allows marketers to communicate to markets using concepts and terms consumers are most 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

17. Status Symbols • Status seeking (through consumption) is a global trend • What matters is having more wealth/fame than others • Lets others know that you have “made it”

18. Parody Display • Deliberately avoiding status symbols • Examples: • Ripped jeans • Sports utility vehicles • Red Wing boots

19. Problems with Social Class Segmentation • Ignores status inconsistencies • Ignores intergenerational mobility • Ignores subjective social class • Ignores consumers’ aspirations • Ignores the social status of working wives

20. Chapter 12: Income & Social ClassKey Concepts • Discretionary income • Attitudes toward money • Consumer confidence • Determinants of social class structure • Social stratification • Achieved vs. ascribed status • Social mobility • American class structure • Components of social class structure • Consumer views of luxury goods • Taste cultures & codes of taste cultures • Status symbols • Parody display • Problems with social class segmentation