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Social Class & Lifestyles Dr. Azita Hirsa

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

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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

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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

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

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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

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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)

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Social Class

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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

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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

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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) Warners Index: occupation, source of income, house type, dwelling area

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Social Class

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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.

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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 lotterywill his social class change?

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Social Mobility Horizontal Mobility Upward Mobility Downward Mobility

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Social Class in the United States

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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

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Class Structure Around the World China Rise of middle class Nikes 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 http://news.bbc.co.uk/2/hi/uk_news/7853360.stm

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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

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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 classReaders Digest, Ladies Home Journal Upper-middle classTime, The New Yorker, etc. Broadcast media choice also varies by social class Upper-middle classNBC vs. lower-middle class: CBS Lower-middle classmore responsive to audiovisual forms of communication

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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?

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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?

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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?

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Social Class & (?) http://www.youtube.com/watch?v=YeSC7j1vqe4&feature=relate d http://www.youtube.com/watch?v=hr- wISyGSW0&feature=PlayList&p=039E34C814281921&playne xt=1&playnext_from=PL&index=5

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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

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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

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Consumption Style

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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 persons desire to make a statement about social class influences the products he likes and dislikes.