1. Income, Social Class and Family Decision Making
Chp. 12 with Duane Weaver

2. OUTLINE Income and Spending Social Class and Impacts
The Family Defined
Effects of Family Structure and Composition
The Family Life Cycle
Family Decision Making
Family Decision Roles

3. Income
Average Canadian Standard of Living relatively high in international standards:
Avg. Family Income = 67.6K in 205 to 75.32K in 2009 Note: In 2008, 2.5 Billion people in world live on <$2/day = $730/year
Poverty Line (Revenue Canada) just over $30,000
Income up due to shift in women’s roles and education
(24% of couples the wives paychecks propelling the income ladder)
% of Cdns. with college diploma 50% (2009) up from 39% (1999)

4. $PENDING or ? + Discretionary Income a.k.a “disposable income”
“the money available for a household over and above that required for a comfortable standard of living.” ^^^what does this really mean??^^^ + or ?

5. SOCIAL CLASS Social Class = a consumer’s standing
Determined by a complex set of variables including income, family background, and occupation within a particular culture. (note we will look at cultural implications separately)
Is it Have vs. Have not?
What is the “have”???
How does the perception of social class impact the cognition of spending? (e.g. minimalism vs. materialism)

6. IMPACTS of SOCIAL CLASS
Picking a Pecking order
E.G.: Max Weber:
Prestige or Social honour (status groups)
Power (party)
Wealth and Property (Class)
Social Stratification: Process by which scarce and valuable resources are distributed unequally to status positions. Examples?

7. SOCIAL CLASS’s Affect on Purchase Decisions
Social class “standing” can be used to segment markets as we see examples of buyer behaviour that are related. E.g.: Working class focusing on Function and Yuppie focusing on Image.
World-view of classes (how globally we see different classes (activities, desires, hopes of change/destiny))
Taste cultures
aesthetic and intellectual preferences
Strong differences in how classes spend discretionary income and leisure time

8. SOCIAL CLASS’s Affect on Purchase Decisions
Targeting Social Class
From what we have learned, how can we better target a specific social class?
High income
Middle income
Low income
Invidious distinction – products that inspire envy in others through display of wealth or power.
Conspicuous consumption – people’s desire to provide prominent, visible evidence of their ability to afford luxury goods.
Parody Display – seek status by reverse consumption, (mocking status symbols – do not buy because it is status related – desire to be above it all).

9. The Family Defined Extended family Nuclear family Family household
traditional family structure
several generations live together
Nuclear family
a married couple and their children
Family household
Containing at least two people
a husband and wife, married or living common law
a lone-parent, with children who have never married and are still living at home

10. Effects of Family Structure on Consumption
Family’s needs and expenditures are affected by
The number of people in a family
The ages of family members
The number of adults employed outside the home

11. Effects of Family Structure on Consumption
The Family Life Cycle
Classifies consumers based on
trends in income, family composition, & demands placed upon income
Life cycles determine which product categories are bought, but not how much is spent on each category.

12. The Family Life Cycle Age of Head of Household Under 35 yrs 35-64 yrs
Dollar value of durables increases as nest empties or parents age
Modern – exercise – go out to bars,concerts, movies..etc
Age of Head of Household
Under 35 yrs
35-64 yrs
Over 64 yrs
One adult in household
Bachelor I
Bachelor II
Bachelor III
Two adults in household
Young couple
Childless couple
Older couple
Two adults plus children in household
Full nest I*
Full nest II*
Delayed full nest*
Full nest III*
Full Nest I: youngest child is younger than 6 yrs
Full Nest II: youngest child is older than 6 yrs
Full Nest III: youngest child is older than 6 yrs and the parents are middle aged
Delayed Full Nest: parents are middle-aged but the youngest child is younger than 6 yrs
Adapted from: Mary C. Gilly and Ben M. Enis

13. Family Decision Making Consensual vs. Accomodative
Consensual purchase decision
the group agrees on the desired purchase
differ on how it will be achieved
Accommodative purchase decision
reaching agreement among group members by bargaining, coercing, compromising and wielding power

14. Family Decision Roles 1) Initiator 3) Gatekeeper 4) Influencer
2) Information Gatherer
3) Gatekeeper
4) Influencer
5) Decision Maker
6) Buyer
7) Preparer
8) User
9) Maintainer
10) Disposer

15. THANK YOU