SOCIAL CLASS

&
CONSUMER
BEHAVIOR
Social Class
Social 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. Occupation
2. Income Level
3. Heritage
4. Educational attainment
5. Possessions
6. 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 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 potential
 The 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 Upper (Old Money)
The Upper •
The Lower (New Rich)
Class
(2%) • The Upper (12%)
• Moderately successful business
The Middle
people, professionals
Class • The Lower (32%)
(45%) •White collar workers, technicians,
small business owners
The Lower •The Upper (38%)
Class •Blue collar (working class)
(54%) •The Lower (16%)
•Unskilled, chronically unemployed,
welfare poor
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 behavior
 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
 Hierogamy: 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
Consumption
 Social class better predictor of symbolic purchases with low
to moderate price
 Income 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
Income

.
Willingness to
Buy

Consumer Market
Demand Potential

Ability to
Buy
Discretionary income

 The money available to a household over and

above that required for a comfortable standard
of living
Sociocultural Influences
Sociocultural influences, which evolve from a
consumer’s formal and informal relationships with
other people, can exert significant impact on consumer
behaviour. Sociocultural influences include:
1. Personal influence
2. Reference groups
3. The Family
4. Social Class
5. Culture
6. Subculture
 SOCIAL AND PSYCHOLOGICAL
GROUP FORCES FORCES
Culture Motivation
Subculture Perception
Social class Learning
Reference groups Personality
Family and households Attitude

INFORMATION SITUATIONAL
BUYING-DECISION PROCESS FACTORS
Commercial When
sources Need recognition consumers buy
Where
consumers buy
Identification of alternatives

Evaluation of alternatives Why consumers

buy
Social sources Purchase and related decisions Conditions
under which
Postpurchase behaviour consumers buy
Lifestyle & VALS
Lifestyle is a mode of living that is identified by how
people spend their time and resources (activities),
what
they consider important in their environment
(interests), and what they think of themselves and the
world around them (opinions).
Lifestyle analysis focuses on identifying consumer
profiles. The most prominent example of this type of
analysis is the Values and Lifestyles (VALS) Program
developed 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 process
 How 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
 Social Stratification
Typically defined by family
background, occupation,
and income.
Class:
some social
Caste: mobility
Virtually no mobility
Class Consciousness:
May play a role in
a firm’s operations
Social Stratification

 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
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 Sustenance and

Comfort
things that contribute to Humor and Diversion
things that contribute to Self-respect and Ego-
expansion
 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 inherited
Achieved, 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:

 Authority over others  Power
 Ownership of Property  Income
 Consumption Patterns  Occupation
& Lifestyle  Education
 Public Service  Ancestry
 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
Social Mobility

 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
Indian Society – ‘ Then ’

 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 & priests
Kshatriya – warriors & rulers
Vaisya – land owners & merchants
Sudra – artisans & servants
 such as potters, barbers, carpenters,
leatherworkers, butchers, launderers, etc
Untouchables – Harijans or Dalits
Indian Society – ‘ Today ’

 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 Class
Techno Class
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
“underclassed”
underclassed and “disadvantaged”
disadvantaged
 Degree of literacy,
literacy familiarity,
familiarity and competency with
technology, especially computers and the Internet,
appears to be a new basis for a kind of “class
standing”,
standing or status or prestige

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

 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 Classes

Upper

Upper-Middle

Middle

Lower-Middle

Lower
Social Class Structure
 Nine–Category Social Classes
Upper-Upper
Upper-Middle
Upper-Lower
Middle-Upper
Middle-Middle
Middle-Lower
Lower-Upper
Lower-Middle
Lower-Lower
Coleman and Rainwater Approach
 Social-Psychological Approach :

based on personal and group prestige

reflects how people interact with one another –
as equals, superiors, or inferiors

 Class Identification

is influenced most heavily by educational

credentials and occupation (including income as
its success measure)
but, ultimately relates to a person’s social circle
of acceptance
 Coleman-Rainwater View
Upper-Upper old family names

Upper-Lower accepted new money

collegiate credentials
Upper-Middle expected

Middle white-collar associations

Working Class blue-collar life style

Lower below the mainstream

Lower-Lower the welfare world

India follows a 5-Tier System

Consumer Annual Income

Group
2,15,000
Very Rich 2,15,000–45,000
Consuming Class 45,000-25,000
Climbers 25,000-16,000
Aspirants 16,000 & Below
Destitute
Growing Indian Middle Class
 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 million
Consuming 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%)
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
 Income
 Education
 Manners and style
 Ownership
 Political
 Prestige
 Genealogy
 Operationalizing Household

Age of Head(s) of Household

Household Structure
Education Occupation Income Residence

Social
Class

Prestige Association Values

Operationalizing Household
Social Class
Age of Head(s) of Household
Household Structure
Education Occupation Income Residence

Social
Class

Prestige Association Values

Social Structure Hard to
Build
Individual
Teams

Western Mobile
Managers
Entrepreneurship
Group Lack
two or more individuals of
with a shared sense Loyalty
of identity

Group
Nonmobile
Managers Lack of
Eastern
Entrepreneurship
Identity Lifetime
Employment
Every Society
 U.S.A.
 Embarrassed about it, ideal is equality & meritocracy
 Intergenerational 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 status
 Differential fertility: Middle class reproduce less than
replacement value, allowing for upward mobility
India

 A Caste System
 Occupation & Marriage
 Brahmin: teachers & priests
 Kshatriya: warriors
 Vaisya: merchants
 Sudra: dirty work
CASTE IN INDIA
 Basis is kinship
 Associated occupation
 Clearly separated, self-regulating groups
 No individual mobility in one lifetime
 No intercaste marriage
 Religious 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.
CLASS
 Basis is economic: income, occupation
 Associated lifestyle
 Mobility is possible: downward and upward
 Interclass marriage is possible
 Class at birth affects life chances: ability to fulfill one’s
potential
 Persons 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
Reference Groups and
Family
 What is a Group?

 Two or more people who interact to

accomplish either individual or
mutual goals

12-65
 Reference Group

 A person or group that serves as a point of

comparison (or reference) for an individual
in the formation of either general or
specific values, attitudes, or behaviour.

12-66
 Types of Reference Groups
Classified by:
Membership
Symbolic
Extent of interaction
Direct versus indirect
Nature of attraction
Aspirational versus dissociative
Degree of formality
Formal versus informal
12-67
 Types of Reference Group
Influence
 Informational Influence
When a member of reference group provides
information used to make purchase decisions
 Normative Influence
When we conform to group norms in order to
belong to that group
 Identification Influence
When we identify with, and internalize, a
group’s values and behaviours

12-68
Factors Encouraging Conformity:
A Reference Group Must ...
 Inform or make the individual aware of a
specific product or brand
 Provide the individual with the opportunity
to compare his or her own thinking with
the attitudes and behaviour of the group
 Influence the individual to adopt attitudes
and behaviour that are consistent with the
norms of the group
 Legitimize the decision to use the same
products as the group
12-69
 Selected Consumer-Related
Reference Groups
 Friendship groups
 Shopping groups
 Work groups
 Virtual groups or communities
 Brand communities
 Consumer-action groups
 celebrities

12-70
12-71
 Reference Groups and Marketing
Strategy
 Recognize the extent of reference group
influence in a situation
 Identify the most effective type of
reference group influence
 Identify possible reference group members
to use in promotions
 Attempt to increase reference group
influence

12-72
 Households

Family Households:
Married couple,
Nuclear family,
Extended family

Households

Non-Family Households:
Unmarried couples,
Friends/ Roommates,
Boarders

12-73
 The Typical Household?

 Canada: Nuclear family

 Thailand: Extended family
 USA: Not married, no children

12-74
 The Family Life Cycle
 Traditional Family Life Cycle
Stage I: Bachelorhood
Stage II: Honeymooners
Stage III: Parenthood
Stage IV: Post-parenthood
Stage V: Dissolution
 Modifications - the Nontraditional FLC

12-75
12-76
Figure 12-6 Noteworthy Nontraditional
FLC Stages
Alternative FLC Stages Definition/Commentary
Family Households
Childless couples It is increasingly acceptable for married couples
to elect not to have children. Contributing forces
are more career-oriented married women and
delayed marriages.

Couples who marry later More career-oriented men and women and
in life (in their late 30s or greater occurrence of couples living together.
later) Likely to have fewer or even no children.

Couples who have first Likely to have fewer children. Stress quality
child later in life (in their lifestyle: “Only the best is good enough”
late 30s or later)

12-77
 Figure 12-6 (continued)
Alternative FLC Stages Definition/Commentary
Family Households
Single parents I High divorce rates (about 50%) contribute to a
portion of single-parent households
Single parents II Young man or woman who has one or more
children out of wedlock.
Single parents III A single person who adopts one or more children.
Extended family Young single-adult children who return home to
avoid the expenses of living alone while
establishing their careers. Divorced daughter or
son and grandchild(ren) return home to parents.
Frail elderly parents who move in with children.
Newlyweds living with in-laws.

12-78
 Figure 12-6 (continued)
Alternative FLC Stages Definition/Commentary
Nonfamily Households
Unmarried couples Increased acceptance of heterosexual and
homosexual couples.

Divorced persons (no High divorce rate contributes to dissolution of

children) households before children are born.

Single persons (most are Primarily a result of delaying first marriage; also,
young) men and women who never marry.

Widowed persons (most Longer life expectancy, especially for women;

are elderly) means more over-75 single-person households.

12-79
12-80
 Dynamics of Husband-Wife
Decision Making
 Husband-Dominated
 Wife-Dominated
 Joint
Equal
Syncratic
 Autonomic
Solitary
Unilateral

12-81
 Consumer Socialization

 The process by which children acquire the

skills, knowledge, and attitudes necessary
to function as consumers.

12-82
12-83
 Other Functions of the Family
 Economic well-being
 Emotional support
 Suitable family lifestyles

12-84
Family and Marketing Strategy
 Use the FLC for segmentation and positioning
 Recognize the diverse consumption roles
within the family
 Understand and use the dynamics of
husband-wife decision making
 Understand and use the consumer
socialization role played by the family
 Recognize the changing nature of Canadian
families.

12-85