1. CHAPTER FOUR The Changing American Society: Demographics and Social Stratification McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 2 CHAPTER 4 Demographics Describe a population in terms of its size, distribution, and structure. Population Size Distribution

3. 3 CHAPTER 4 A Tale of Three Cities…

4. 4 CHAPTER 4 Demographics: Occupation

5. 5 CHAPTER 4 Demographics: Education

6. 6 CHAPTER 4 Demographics: Income Enables but does not generally cause or explain them What is wealth? Subjective Discretionary Income Total Family Income

7. 7 CHAPTER 4 Demographics: Age 18-24 25-34 35-44 45-54 55-64 65+

8. 8 CHAPTER 4 Consumer Insight 4-1 Cognitive age is measured on four dimensions. What additional dimensions, if any, do you think should be added? Do you think cognitive age is a valid concept? Why? If the meaning of age is a cultural concept, how would the concept and measurement of cognitive age change across cultures? How can marketers use cognitive age?

9. 9 CHAPTER 4 Consumer Insight 4-2 The percentage of the American population that is elderly is going to increase dramatically over the next 20 years. How is this going to change the nature of American society? What ethical and social responsibilities do marketers have when marketing to the elderly?

10. 10 CHAPTER 4 Generations/Age Cohorts Generation/Age Cohort: a group of persons who have experienced a common social, political, historical, and economic environment Cohort Analysis: the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors

11. 11 CHAPTER 4 Understanding American Generations Pre-depression (Before 1930) Depression (1930 to 1945) Baby Boom (1945 to 1964) Generation X (1965 to 1976) Generation Y (1977 to 1994) Millennials (After 1994)

12. 12 CHAPTER 4 Social Standing Influences Behavior

13. 13 CHAPTER 4 The Coleman-Rainwater Social Class Hierarchy

14. 14 CHAPTER 4 The Coleman-Rainwater Social Class Hierarchy

15. 15 CHAPTER 4 Upward-Pull Strategy

16. 16 CHAPTER 4 Group Exercise Form a group of four people Develop a scale of measurement for social status Be able to answer the following: Single-Item or Multi-Item? What is the main effect (most important factor)of the index? What are the strengths and weaknesses? What products or services would be the best application of your index?

17. 17 CHAPTER 4 Measuring Social Status Single-Item Indexes Education Occupation (Socioeconomic Index: SEI) Income Relative Occupational Class Income Subjective Discretionary Income Multi-Item Indexes Hollingshead Index of Social Position Warner’s Index of Status Characteristics Census Bureau’s Index of Socioeconomic Status

18. 18 CHAPTER 4 Hollingshead Index of Social Position (ISP) Occupation Scale (Weight of 7) DescriptionScore Higher executives of large concerns, proprietors, and 1 major professionals Business managers, proprietors of medium-sized businesses, 2 and lesser professionals Administrative personnel, owners of small businesses, and 3 minor professionals Clerical and sales workers, technicians, and owners of little 4 businesses Skilled manual employees5 Machine operators and semiskilled employees6 Unskilled employees7

19. 19 CHAPTER 4 Hollingshead Index of Social Position (ISP) Education Scale (Weight of 4) DescriptionScore Professional (MA, MS, ME, MD, PhD, LLD, and the like)1 Four-year college graduate (BA, BS, BM)2 One to three years college (also business schools)3 High school graduate4 Ten to 11 years of school (part high school)5 Seven to nine years of school6 Less than seven years of school7

20. 20 CHAPTER 4 Hollingshead Index of Social Position (ISP) ISP score = (Occupation score X 7) + (Education score X 4) Classification System Range of DescriptionScores Upper 11-17 Upper-middle 18-31 Middle 32-47 Lower-middle 48-63 Lower 64-77

21. 21 CHAPTER 4 Warner’s Index of Status Characteristics (ISC) 1 Professionals and pro-InheritedExcellent Very high: Gold Coast, prietors of large businesses wealth houses North Shore, etc. 2 Semiprofessionals & Earned Very good High: better suburbs & officials of large businesseswealth apartment house areas 3 Clerks and kindred Profits & Good houses Above average: areas all residential, workers fees space around houses, apartments in good condition 4 Skilled workers Salary Average Average: residential neighborhoods, houses no deterioration 5 Proprietors of small Wages Fair houses Below average: area beginning to businesses deteriorate, business entering 6 Semiskilled workers Private relief Poor houses Low: considerably deteriorated, run down and semi-slum 7 Unskilled workers Public relief & Very poor Very low: slum nonrespectable houses income Characteristics Score Source ofHouse OccupationIncomeTypeDwelling Area

22. 22 CHAPTER 4 Upper-upper12-17 1.4% Lower-upper18-24 1.6 Upper-middle 25-37 10.2 Lower-middle 38-50 28.8 Upper-lower 51-62 33.0 Lower-lower 63-84 25.5 Classification System Range ofPopulation Social StrataScores Breakdown Warner’s Index of Status Characteristics (ISC) ISC score = (Occupation X 4) + (Income source X 3) + (House type X 3) + (Dwelling area X 2)

23. 23 CHAPTER 4 Census Bureau Index of Socioeconomic Status (SES) Under $3,000 15Some grade school 10Laborers 20 $3,000-$4,999 31 Grade school graduate 23 Students 33 $5,000-$7,999 62 Some high school 42 Service workers 34 $8,000-$9,999 84 High school graduate 67 Operators 58 $10,000-$14,999 94 Some college 86Craftsmen 58 $15,000-$19,999 97 College graduate 93 Clerical sales 71 $20,000-$29,999 99 Graduate school 98 Managers 81 $30,000 and over 100 Professionals 90 *Note: Income levels should be adjusted by consumer price index before using. Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15 (Washington, D.C.: U.S. Government Printing Office, 1963). IncomeEducation Occupation Category*ScoreCategory Score Category Score

24. 24 CHAPTER 4 Census Bureau Index of Socioeconomic Status (SES) (Income) + (Education) + (Occupation) SES score = 3 Upper90-9915.1% Upper-middle 80-8934.5 Middle45-7934.1 Lower-middle 0-4416.3 *Note: Income levels should be adjusted by consumer price index before using. Source: U.S. Bureau of the Census, Methodology and Scores of the Socioeconomic Status, Working Paper No. 15 (Washington, D.C.: U.S. Government Printing Office, 1963). Classification System Range ofPopulation Social StrataScores Breakdown

25. 25 CHAPTER 4 Using Social Class… Choosing the best measure Will a single-item index be accurate enough? What is the underlying factor I should be concerned with? Issues and Assumptions Upward Social Mobility Class Consciousness Dated social-class measures

26. 26 CHAPTER 4 Positioning and Social Class Segments

27. 27 CHAPTER 4 Perceived Social Class Appeal