Chapter 15What is social class?Why does social class matter to marketers?Slide 4Social class structure in the U.S.Slide 6Slide 7Slide 8Marketing implicationsSocial class distinctions in the U.S.Marketing implications of upward mobilityDownward mobilitySlide 13Slide 14Slide 15Measuring social class1. Subjective measures2. Reputational measures3. Objective measuresSlide 20IndexesSingle-variable indexesSlide 231. EducationSlide 252. IncomeSlide 273. PossessionsComposite-variable indexSlide 30Social ClassSocial ClassChapter 15Social ClassWhat is social class?The division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less statusWhy does social class matter to marketers?Social class is a natural form of segmentationSocial class membership serves consumers as a frame of reference (reference group) for the development of their attitudes and behaviorThus members of a social class turn to other members of that class for cues regarding appropriate behaviorIf they aspire to a higher social class, they will emulate the behavior of members of that classClassifying society’s members into a small number of social classes enables researchers to note the existence of shared values, attitudes, and behavior patterns among members within each social class; and the differing values, attitudes and behavior between social classesResearchers are also able to relate social class standing to consumer attitudes toward specific products and to examine social class influences on the actual consumption of productsSocial class structure in the U.S.Researchers disagree on how many distinct class divisions are necessary to adequately describe class structure in the U.S.As few as twoAs many as nineChoice depends on the amount of detail the researcher believes is necessary to explain the attitudes or behavior under studyVariations in the Number and Types of Social-Class CategoriesTWO-CATEGORY SOCIAL CLASS SCHEMAS•Blue-collar, white-collar•Lower, upper•Lower, middleTHREE-CATEGORY SOCIAL CLASS SCHEMAS•Blue-collar, gray-class, white-collar•Lower, middle, upperFOUR-CATEGORY SOCIAL CLASS SCHEMAS•Lower, lower-middle, upper-middle, upperFIVE-CATEGORY SOCIAL CLASS SCHEMAS•Lower, working-class, lower-middle, upper-middle, upper•Lower, lower-middle, middle, upper-middle, uppercontinuedSIX-CATEGORY SOCIAL CLASS SCHEMAS•Lower-lower, upper-lower, lower-middle, upper-middle, lower-upper, upper-upperSEVEN-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-upperNINE-CATEGORY SOCIAL CLASS SCHEMAS•Lower-lower, middle-lower, upper-lower, lower-middle, middle-middle, upper-middle, lower-upper, middle-upper, upper-upperPercent Distribution of Five-Category Social-Class MeasureSOCIAL CLASSES PERCENTAGEUpper 4.3Upper-middle 13.8Middle 32.8Working 32.3Lower 16.8Total percentage 100.0Marketing implicationsMany mass marketers have chosen either to ignore the upper class or to combine them with the upper-middle classSmall size and highly cultivated tastes make the upper class a desirable target market for specialty firms with the ability to cater to a small number of affluent consumersSocial class distinctions in the U.S.1. Egalitarianism2. Size of the middle class3. Upward mobilityMarketing implications of upward mobilityRecognizing that individuals often aspire to the lifestyle and possessions enjoyed by members of a higher social class, marketers frequently incorporate the symbols of higher-class membership--both as products and props--in advertisements targeted to lower social-class audiencesDownward mobilitySocial commentators have suggested that some young adults, particularly Gen-X’ers, are unlikely to do better than, or even as well as, their parentsThe number of young men reaching middle class income-levels by their 30th birthday has been decliningThe middle class is shrinking in size and purchasing powerThe upper class is growing in size and purchasing powerThe lower class is growing in size but not in purchasing powerThe rich are getting richer and the poor are getting poorerWe are becoming a two-tiered societyThe havesThe have-notsToday U.S. has the most unequal distribution of wealth and income of any western societyThe wealthiest 1% own more wealth than the bottom 95%The richest 13,000 families earn more than the bottom 20 millionIn 1997, Bill Gates owned more wealth than the bottom 45% of American households combinedOver the last 30 years, the top 100 CEO’s went from earning 39 times the pay of their ordinary workers to more than 1,000 timesMedian household net worth matches the sticker price of a new Ford ExpeditionMarketing implicationsMany marketers have adopted a “Tiffany/Wal-Mart” strategyMeasuring social classThere is no general agreement on how to measure social classResearchers are uncertain about the underlying dimensions of social class structureSystematic approaches for measuring social class fall into the following broad categories:1. Subjective measures2. Reputational measures3. Objective measures1. Subjective measuresIndividuals are asked to estimate their own social class positions; response is based on participants’ self-perceptions or self-imagesCan lead to an inaccurate profile of social classesSubjective measures of social class membership tend to produce an overabundance of people who classify themselves as middle class2. Reputational measuresSelected community informants make initial judgments concerning the social class membership of others within the communityTrained researchers then assign community members to social class positions3. Objective measuresResearchers use questionnaires that ask respondents several factual questions about themselves, their families, or their places of residence1. Amount and source of income2. Location and type of residence3. Education4. PossessionsMarketing managers who have developed socioeconomic profiles of their target markets can locate these markets by studying socioeconomic data provided bythe U.S. Bureau of the Censusnumerous commercial geodemographic data servicesmass media organizationsIndexes Objective measures of social class fall into two basic