Social Class and Consumer Behavior Chapter 11 Social Class and Consumer Behavior

Social Class The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes

Social Class and Social Status Social status is usually defined in terms of one or more of the following socioeconomic variables: Family Income Occupational Status Educational Attainment

Table 11.1 Variations in the Number and Types of Social-Class Categories TWO-CATEGORY SOCIAL CLASS SCHEMAS Blue-collar, white-collar Lower, upper Lower, middle THREE-CATEGORY SOCIAL CLASS SCHEMAS Blue-collar, gray-class, white-collar Lower, middle, upper FOUR-CATEGORY SOCIAL CLASS SCHEMAS Lower, lower-middle, upper-middle, upper FIVE-CATEGORY SOCIAL CLASS SCHEMAS Lower, working-class, lower-middle, upper-middle, upper Lower, lower-middle, middle, upper-middle, upper

Table 11.1 continued SIX-CATEGORY SOCIAL CLASS SCHEMAS Lower-lower, upper-lower, lower-middle, upper-middle, lower-upper, upper-upper SEVEN-CATEGORY SOCIAL CLASS SCHEMAS Real lower-lower, a lower group of people but not the lowest, working class, middle class, upper-middle, lower-upper, upper-upper NINE-CATEGORY SOCIAL CLASS SCHEMAS Lower-lower, middle-lower, upper-lower, lower-middle, middle-middle, upper-middle, lower-upper, middle-upper, upper-upper

Table 11.2 Percent Distribution of Five-Category Social-Class Measure SOCIAL CLASSES PERCENTAGE Upper 4.3 Upper-middle 13.8 Middle 32.8 Working 32.3 Lower 16.8 Total percentage 100.0

The Measurement of Social Class Subjective Measures Reputational Measures Objective Measures

Subjective Measures In the subjective approach to measuring social class, individuals are asked to estimate their own social-class positions.

Reputational Measures The reputational approach requires selected community informants to make initial judgments concerning the social-class membership of others within the community.

Objective Measures of Social Class A method of measuring social class whereby individuals are asked specific socioeconomic questions concerning themselves or their families On the basis of their answers, people are placed within specific social-class groupings.

Objective Measures Single-variable indexes Composite-variable indexes Occupation Education Income Other Variables Composite-variable indexes Index of Status Characteristics Socioeconomic Status Score

Single-Variable Index The use of a single socioeconomic variable (such as income) to estimate an individual’s relative social class.

Chapin’s Social Status Scale A social class rating scheme that focuses on the presence or absence of certain items of furniture and accessories in the home.

Composite-Variable Index An index that combines a number of socioeconomic variables (such as education, income, occupation) to form one overall measure of social class standing.

Index of Status Characteristics (ISC) A composite measure of social class that combines occupation, source of income (not amount), house type and dwelling area into a single weighted index of social class standing. Also known as Warner’s ISC.

Socioeconomic Status Score (SES) A multivariable social class measure used by the United States Bureau of the Census that combines occupational status, family income, and educational attainment into a single measure of social class standing.

Table 11.3 Readers’ Median Household Income for Selected Publications NEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOME Wall Street Journal $86,109.4 Barron’s 83,075.5 New York Times Daily 78,093.1 Architectural Digest 71,483.6 Forbes 68,518.7 Money 64,423.2 PC World 60,680.4 New Yorker 59,471.0 Smithsonian 55,5646 Newsweek 54,842.2 Time 52,283.5 Car & Driver 52,338.0 National Geographic 49,561.4

Table 11.3 continued NEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOME People $48,206.4 Town & Country 47,810.3 Esquire 45,565.4 Cosmopolitan 42,937.8 Playboy 39,759.1 Field & Stream 39,164.8 Outdoor Life 38,765.6 Hunting 38,299.9 Family Circle 39,476.5 Soap Opera Weekly 28,583.8 Ebony 27,744.8 True Story 17,426.1

Table 11.4 Occupational Rankings in Terms of Honesty and Ethical Standards COMBINED PERCENT* Druggists/pharmacists 1 69% Clergy 2 59 Medical doctors 3 56 College teachers 4 55 Dentists 5 54 Police officers 6 49 Engineers 7 49 Funeral directors 8 36 Bankers 9 34 Public opinion pollsters 10 23 Journalists 11 23 TV reporters, commentators 12 22

*Rank is based on the combination of “very high” and “high” rating. Table 11.4 continued OCCUPATIONAL 1997 RANK COMBINED PERCENT* Business executives 13 20 Local officeholders 14 20 Building contractors 15 20 Newspaper reporters 16 19 Stockbrokers 17 18 State officeholders 18 17 Real estate agents 19 16 Lawyers 20 15 Labor union leaders 21 15 Senators 22 14 Advertising practitioners 23 12 Congresspeople 24 12 Insurance salespeople 25 12 Car salespeople 26 8 *Rank is based on the combination of “very high” and “high” rating.

NO MORE THAN ELEM. SCHOOL Table 11.5 The Relationship between Formal Education and Household Income TOTAL NO MORE THAN ELEM. SCHOOL SOME HIGH SCHOOL HIGH SCHOOL GRAD. 1 TO 3 YEARS OF COLL. 4+ YEARS OF COLL. ALL HOUSEHOLDS 100% 100% 100% 100% 100% 100% Under $10,000 11.7 31.9 24.4 11.4 8.3 3.3 $10,000 to $14,999 8.5 18.0 16.0 9.1 6.8 3.3 $15,000 to $24,999 15.5 22.0 23.3 18.2 14.5 7.5 $25,000 to $34,999 14.0 12.0 13.3 16.9 15.1 10.3 $35,000 to $74,999 17.6 5.6 7.5 16.9 21.2 23.2 $75,000 and Over 15.6 2.1 3.3 8.7 14.3 35.2 Households (000’s) 94,364 8,062 9,683 29,507 23,670 23,424 Median income $35,235 $15,043 $18,298 $31,376 $39,637 $58,052

Table 11.6 Typical Categories Used for Assessing Amount or Source of Income AMOUNT OF INCOME Under $25,000 per year $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $124,999 $125,000 to $149,999 $150,000 to $174,999 $175,000 to $199,999 $200,000 and over SOURCE OF INCOME Public welfare Private financial assistance Wages (hourly) Salary (yearly) Profits or fee Earned wealth Inherited wealth, interest, dividends, royalties

Table 11.7 Social-Class Profiles THE UPPER-UPPER CLASS--COUNTRY CLUB ESTABLISHMENT Small number of well-established families Belong to best country clubs and sponsor major charity events Serves as trustees for local colleges and hospitals Prominent physicians and lawyers May be heads of major financial institutions, owners of major long-established firms Accustomed to wealth, so do not spend money conspicuously THE LOWER-UPPER CLASS--NEW WEALTH Not quite accepted by the upper crust of society Represent “new money” Successful business executive Conspicuous users of their new wealth

Table 11.7 continued THE UPPER-MIDDLE CLASS--ACHIEVING PROFESSIONALS Have neither family status nor unusual wealth Career-oriented Young successful professionals, corporate managers, and business owners Most are college graduates, many with advanced degrees Active in professional, community, and social activities Have a keen interest in obtaining the “better things in life” Their homes swerve as symbols of their achievements Consumption is often conspicuous Very child-oriented

Table 11.7 continued THE LOWER-MIDDLE CLASS--FAITHFUL FOLLOWERS Primary nonmanagerial white-collar workers and highly paid blue-collar workers Want to achieve “respectability” and be accepted as good citizens Want their children to be well-behaved Tend to be churchgoers and are often involved in church-sponsored activities Prefer a neat and clean appearance and tend to avoid faddish or highly-styled clothing Constitute a major market for do-it-yourself products

Table 11.7 continued THE UPPER-LOWER CLASS--SECURITY-MINDED MAJORITY The largest social-class segment Solidly blue-collar Strive for security (sometimes gained from union membership) View work as a means to “buy” enjoyment Want children to behave properly High wage earners in this group may spend impulsively Interested in items that enhance their leisure time (e.g., TV sets) Husbands typically have a strong “macho” self-image Males are sports fans, heavy smokers, beer drinkers THE LOWER-LOWER CLASS--ROCK BOTTOM Poorly educated, unskilled laborers Often out of work Children are often poorly treated Tend to live a day-to-day existence

Geodemographic Clusters A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods, or blocks) and demographic variables (e.g., income, occupation, value of residence) to identify target markets.

PRIZM (Potential Rating Index by Zip Market) A composite index of geographic and socioeconomic factors expressed in residential zip code neighborhoods from which geodemographic consumer segments are formed.

Table 11.9 A Profile of PRIZM Cluster: “Young Literati” (Cluster 08) SOCIOECONOMIC FACTORS: Percent of U.S. households 0.94% Predominant age range 25-34, 35-44 Socioeconomic group Upper middle Demographic caption Upscale urban singles and couples Housing type Renter Education College graduates Occupation Professional LIFESTYLE: Plan for large purchases Take vitamins Use a discount-broker Watch Bravo Read GQ

Figure 11.4 Three Segments of Affluent Consumers’ Average Household Expenditures (among purchasing households)

Figure 11.5 Affluent Consumers’ Participation in Selected Sports

Table 11.10 Affluent Readers’ ($70,000+ Median Household Income) for Selected Publications NEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOME ($) Allure 115,400 Architectural Digest 125,400 Art & Antiques 103,200 Better Homes and Gardens 96,600 Boating 101,400 Bon Appetit 119,200 Business Week 121,500 Cigar Aficionado 115,100 Conde Nast Traveler 123,500 Elle 119,900 Esquire 108,200 Fortune 121,900 Golf Magazine 102,200 Good Housekeeping 94,800

Table 11.10 continued NEWSPAPER/MAGAZINE MEDIAN HOUSEHOLD INCOME ($) Gourmet 120,600 GQ/Gentlemen’s Quarterly 103,500 House & Garden 100,300 Martha Stewart Living 100,000 National Geographic 97,000 Newsweek 109,000 Self 103,800 Southern Accents 120,800 Town & Country 124,200 Travel & Leisure 111,100 U.S. News & World Report 99,900 Vanity Fair 124,700 Vogue 119,800 W 138,000

MRI Affluent Market-Segmentation Schema Affluent Segments Well-feathered Nests No Strings Attached Nanny’s In Charge Two Careers The Good Life Rural Affluent Segments Suburban Transplants Equity-rich Suburban Expatriates City Folks with Country Homes Wealthy Landowners

Consumer Behavior and Social Class Clothing, Fashion, and Shopping The Pursuit of Leisure Saving, Spending, and Credit Social Class and Communication