1. Social Class & Lifestyles
Dr. Azita Hirsa

2. Social Class
Both personal and social conditions influence how we spend our money.

3. Discretionary Income
The money available to a household over and above what it requires to have a comfortable standard of living
How we spend varies based in part on our attitudes toward money
Tightwads
hate to part with their money and actually experience emotional pain when they make purchases
Driven by pain of paying NOT the pleasure of saving
Spendthrifts
Enjoy nothing more than spending

4. Consumer Confidence Consumer confidence
Consumer beliefs about what the future holds
Factors affecting the overall savings rate:
Pessimism/optimism about personal circumstances
Optimism = reduce savings rate
World events
Cultural differences in attitudes toward savings

5. For Reflection
How does your own attitude toward spending affect your general shopping patterns?

6. Grouping Consumers to Understand & Predict Their Behaviors
Social class as an aggregate of several measures that can describe a person or a household
People who are similar on social class indicators are often similar in their consumer behaviors

7. What is Social Class?
Status hierarchy by which groups and individuals are classified on the basis of esteem and prestige – AMA
A group of people whom other members of the community see as equal to one another in social prestige and whom others believe to be superior or inferior in prestige to other groups that constitute the social classes below them or above them (L. Warner)

8. Social Class

9. Social Class Membership
Members of the same social class tend to share common values, beliefs, and behaviors that unite them
Membership in a higher class generally leads to greater influence within the workplace, organizations, and society as a whole

10. Social Class Structure
“Haves” versus “have-nots”
Social class is determined by income, family background, and occupation
Universal pecking order: relative standing in society
Social class affects access to resources

11. What is your Social Class? Measures
Subjective (rank self)
Reputational (someone gives opinion of your social class)
Objective methods (uses scores on various observable variables)
Warner’s Index:  occupation, source of income, house type, dwelling area

12. Social Class

13. Income Source
Income source along with occupation, and education may  help us determine whether two individuals that have the same income belong in the same class:
investments, inheritance, old wealth, etc.

14. What do you think?
Does a professional athlete making $20 million belong in the same social class with a physician making $150,000
A mechanic wins $50 million in the lottery…will his social class change?

15. Social Mobility
Horizontal Mobility
Upward Mobility
Downward Mobility

16. Social Class in the United States

17. Social Class in the US - A five-class hierarchy
Upper class
Attend elite schools, engage in inconspicuous consumption
Upper-middle class
Professionals, independent businesspeople, corporate executives
Lower-middle class
Salespeople, clerical workers, supervisors, construction contractors, small retail store owners
Upper-lower class
Skilled and semi-skilled blue-collar workers
Lower-lower class
Lower blue-collar workers, the  unemployed, families on welfare, and unskilled workers

18. Class Structure Around the World
China – Rise of middle class
Nike’s new brand presence there
Japan – A status- and brand-conscious society
Single, working women spending on luxury goods
Middle East – Major retailers/brands where Arab women enjoy shopping with their families/friends
England – Rigid class structure still exists, but the dominance of its aristocracy is fading (or is it?)
Marketers are targeting chavs’ interest in fashion, food, and gadgets

19. Social Class – Important Source of Beliefs, Values, & Behaviors
Different social classes value education differently
Attitudes toward family life, raising children, the role of women, etc., vary from class to class
Time with children, attitude toward work, care of self
People in various social classes exhibit markedly different lifestyles
Activities outside home, times of meals, types of sports

20. Taste Cultures: Social Class & Media Use
Lower-class people are less likely to subscribe to newspapers than are members of the middle class
Choice of magazine is likely tied to education & reading ability
Lower-middle class—Reader’s Digest, Ladies Home Journal
Upper-middle class—Time, The New Yorker, etc.
Broadcast media choice also varies by social class
Upper-middle class—NBC vs. lower-middle class: CBS
Lower-middle class—more responsive to audiovisual forms of communication

21. Social Class & Shopping
Lower-class women are the most “impulsive” about shopping. Why?
Upper-lower class women are likely to respond to promotions offering coupons or other special inducements. Why?
Members of the upper class prefer traditional home furnishings. Why?

22. Social Class & Leisure
Bowling, TV, and bingo are favorite lower-class leisure pursuits. Why?
Most activities enjoyed by middle- and upper-class people are less time consuming than lower-class choices. Why?

23. Social Class & Advertising
Lower-status consumers are more receptive to advertising that depicts activity, ongoing work and life, expressions of energy, etc.  Why?
Upper-middle class consumers are more critical of advertising, suspicious of emotional appeals, and skeptical of claims.  Why?

24. Social Class & (?) d
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25. Status Symbols What matters is having more wealth/fame than others
Status-seeking: motivation to obtain products that will let others know that you have “made it”

26. Problems with Social Class Segmentation
Ignores status inconsistencies
Ignores intergenerational mobility
Ignores subjective social class
Ignores consumers’ aspirations to change class standing
Ignores the social status of working wives

27. Consumption Style

28. Chapter Summary
Both personal and social conditions influence how we spend our money.
We group consumers into social classes that say a lot about where they stand in society.
A person’s desire to make a statement about social class influences the products he likes and dislikes.