Marketing exam paper
zhichen1027
INCOMEANDSOCIALCLASS.pptx
Understanding the Consumer
Income and Social Class
Dr L. Spiteri Cornish
Last Lecture…
We discussed:
The historical advancement of women from a marketing/consumer behavior perspective
The role of women in contemporary societies and the way they are portrayed in advertising
The role of men in contemporary society and the way they are portrayed in advertising
How men and women differ in their buying behavior.
Lecture Objectives
After this lecture, you should understand :
That both personal and social conditions influence how we spend our money.
How we group consumers into social classes and how this defines where they stand in society.
That a person’s desire to make a statement about his social class, or the class to which he hopes to belong, influences the products he likes and dislikes.
What is Social Class?
Social class refers to an individual's standing in society.
Social class can be classified with various market segments, such as upper, middle, and lower class.
Social class groups relate their purchase decisions to their purchasing power, which is dependent upon the group’s disposable income.
Solomon, M., Bamossy, G., Askegaard, S & Hogg, K. (2013) Consumer behaviour: a European perspective, Pearson: London.
What is Social Class?
Virtually all groups make distinctions among members in terms of relative superiority, power, and access to valued resources.
Every individual senses that he is more at home with and more acceptable to some groups than to others
Consumers often use external symbols of status to indicate their position in society.
Can you give me examples of external symbols?
Zubin, S and Blythe, J. (2016) Consumer behaviour. Sage: London.
Schiffman, L. G. and Wisenblit, J. (2014) Consumer Behaviour. Prentice Hall: London
Savage M, Devine F, Cunningham N, et al. (2013) A new model of social class? Findings from the BBC’s Great British Class Survey Experiment. Sociology 47(2): 219–250
Social Class
Social class structures begin to evolve from the moment an individual is born into a particular family structure.
Many societies are divided into the “haves” and the “have-nots”, resulting in social stratification.
Social stratification is the process by which scarce and valuable resources are distributed unequally to status positions (Solomon, Zaichkowsky, Polegato, 2004).
Social Class Components
Social class is comprised of three major components: occupation, income, and education.
Educational attainment is strongly linked to income and occupation (Solomon, Zaichkowsky, Polegato, 2004), since a good education tends to lead to better and higher paying jobs.
Occupation plays a critical factor in consumer spending: it specifies their leisure & living patterns ; This helps marketers understand which products appeal to a specific social class.
Income itself is not a strong indicator of social class, but how that income is spent is.
Partha Dasgupta, P., Southerton, D., Ulph, A. and Ulph, D. (2016). Consumer Behaviour with Environmental and Social Externalities: Implications for Analysis and Policy, Environmental and Resource Economics, 65(1),191–226
Social Mobility
Climbing Up the Ladder (0.30 – 3.50)
Barki, E. and Parente, J. (2010) Consumer behaviour of the base of the pyramid market in Brazil, Greener management international, 11-23
Socio-Economic Groupings
| A | Upper Middle Class | High managerial/ professional e.g.company director, doctor, solicitor |
| B | Middle Class | Intermediate managerial/admin/professional |
| C1 | Lower Middle Class | Supervisory/clerical/junior managerial |
| C2 | Skilled Working Class | Skilled manual workers |
| D | Working Class | Semi-skilled or unskilled workers |
| E | Pensioners, casual workers | Pensioners, unemployed, homeless |
A basic assumption of economic psychology is that consumer demand for goods and services depends on their ability and willingness to buy.
Discretionary spending only occurs when people are able and willing to spend money on items above and beyond their basic needs.
Consumer confidence or the state of mind consumers have about their own personal situation, as well as their feelings about their overall economic prospects helps to determine whether they will purchase goods, take on debt or save their money.
Factors Influencing Consumer Spending
Durmaz, Y., Kalyoncu, H., Üzeri, Y., Taşdemir, A. and Kalyoncu, H. (2014). A Theoretical Approach to the Influence of Social Class on Consumer Behavior, International Journal of Social Science, 3(3).
Targeting the Affluent
Marketers focus on targeting the affluent (upper) social class as this upscale market is comprised of individuals with significant resources to spend on expensive products.
An affluent social class is defined by their standard of living, where they receive their income, how they got it, and how long they have had it.
Solomon, M., Zaichkowsky, J. L. and Polegato, R. (2011) Consumer Behaviour: Buying, Having, Pearson: London.
Targeting the Affluent
Affluent people are more likely to buy:
Theatre, art, books, travel (especially unusual foreign) donations to good causes, prestige schooling, membership of private clubs, high quality prestige brands.
More likely to engage in careful information search.
Less likely to use price as an indicator of quality but rely on actual product characteristics
More concerned about long term purchases
Targeting the Affluent
The affluent social class can be divided further into three groups based on their attitudes toward luxury:
Luxury is a functional need:
Luxury is a reward:
Luxury is an indulgence:
O’Cass, A. (2012). Exploring consumer status and conspicuous consumption, Journal of Consumer Behaviour, 4(1), 25–39
Targeting the Middle Classes
Those in the middle classes work with their minds.
Often provide professional service to the upper classes e.g. healthcare, education.
More than one segment.
Secure jobs, long hours, high psychological demands.
Well educated/ educated parents.
Becoming more diverse: more multi-cultural (immigration),
Motohashi, K. (2015) Marketing Theory in Global Business Strategy, Springer: USA.
Targeting the Middle Class
More likely to spend on:
Housing (location important), education, quality branded clothes, home furnishings, wine, eating out, golf, tennis, squash, skiing, buy on credit
Spend on comfort, pleasure, youth, time-savers.
Value substance over style and quality over show.
Look to Upper Classes (Cultural trickle-down)for guidance on dining etiquette, apparel selection etc.
Williams, T. G. 2002) "Social class influences on purchase evaluation criteria ", Journal of Consumer Marketing,19(3), pp.249 - 276
Targeting the Working Class
People who work with their hands; Routine, mechanised jobs with little job security.
Becoming more ethnic, more female, more educated.
More unemployment, illness and shorter lives.
Children aspire to fashion brands as a means of symbolic self-completion.
Resistant to change, traditional gender roles exist: Women in home, men the breadwinners, men go hunting, fishing, to the pub, mend the car.
More limited horizons: socially, psychologically and geographically.
Motohashi, K. (2015) Marketing Theory in Global Business Strategy, Springer: USA.
Targeting the Working Class
More likely to:
Eat at home, spend rather than save, judge quality by price, shop in mass retail/discount stores, buy domestic vehicles over foreign
Be more brand loyal – look for popular brands, often spend more than they need to.
Be more concerned with short term needs
Believe in external control of their lives.
Smoke, drink and eat fast food.
Lively ads and promos work well as they break the monotony of their mundane lives.
Motohashi, K. (2015) Marketing Theory in Global Business Strategy, Springer: USA.
Targeting the Poor?
Approximately 14 million people families live in poverty in the UK (Oxfam 2015).
Although they obviously spend significantly less than the more affluent classes, they have the same basic needs as all social classes (i.e. food, housing, etc.).
Unfortunately, most businesses are reluctant to open in low-income areas. Many residents of very poor neighbourhoods must travel vast distances to have access to supermarkets, drug stores, etc.
Solomon, M., Zaichkowsky, J. L. and Polegato, R. (2011) Consumer Behaviour: Buying, Having, Pearson: London.
Rogers, H. P., Peyton, R., and Berl, R. L. (2012) The Notion of Social Class and the Minority Buyer, Minority Marketing: Issues and Prospects, Proceedings of the Academy of Marketing Science, pp 28-32.
Status Symbol
A major component of social class is impacted by the status symbols associated with certain products.
Can you think of any??
Members of affluent social classes purchase these status symbols to display their wealth.
Keeping up with the Jones’s
Status-seeking: motivation to obtain products that will let others know that you have “made it”
Status symbols vary between countries, based on the states of their economic and technological development, and common status symbols change over time with societal and cultural changes.
Social Class Marketing Implications
Social class has a significant impact on purchasing decisions. Consumer behaviour is heavily reliant on the concept of social class, which defines consumer consumption patterns.
As such, social class is associated with the values and life-styles of consumers, both of which significantly determine the consumption structure and behaviour for numerous products.
It is becoming increasingly important for marketers to begin marketing to lower income earners, especially in rapidly developing areas (i.e. China, India, etc.). By developing ways of producing high quality products at a lower cost, lower-income consumers will be able to purchase products that were until then out of their price range.
Williams, T. G. 2002) "Social class influences on purchase evaluation criteria ", Journal of Consumer Marketing,19(3), pp.249 - 276
Income & Social Class
Income is NOT strongly related to social class because:
Income levels overlap between social classes
Incomes increase with age but older people are not of a higher social class
Dual career families generate higher incomes but not necessarily higher status
Income cannot explain social class but social class can explain how income is used
Status is more closely related to occupation than income.
Classes are mostly to do with social networks and peer judgements of “people quality”
Also : what about future aspirations?
Relative value of social class versus income in predicting consumer behaviour:
Social class appears to be a better predictor of purchases that have symbolic aspects.
Income is a better predictor of major expenditures that do not have status or symbolic aspects.
Social class and income data together are better predictors of purchases of expensive, symbolic products.
Income and Social Class
Zubin, S and Blythe, J. (2016) Consumer behaviour. Sage: London.
Schiffman, L. G. and Wisenblit, J. (2014) Consumer Behaviour. Prentice Hall: London
To Do…
Read the chapter on “Income and Social Class.”
ONLY if you have time (Coursework comes first!!!) read the following:
Sobel, M.E., De Graaf, N.D, Heath, A. & Zou, Y (2003) Men matter more: the social class identity of married British women 1985-1991, Journal of Royal Statistical Society, pp37-52
