12
Income and Social Class
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When you finish this chapter
you will understand:
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Chapter
Objectives
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1
Why do both personal and social conditions influence how we spend our money?
2
How do we group consumers into social classes that say a lot about where they stand in society?
3
Why does a person’s desire to make a statement about his social class, or the class to which he
5 products he likes and dislikes?
hopes to belong, influence the
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her parents. He was doing some
R
contracting work at the securities firm where
I
Marilyn works, and it was love at first sight. Even though Phil attended the “School of Hard Knocks”
S they knew they could work
on the streets of Brooklyn and Marilyn was fresh out of Princeton, somehow
things out despite their vastly different backgrounds. Marilyn hinted that T
her family has money, but Phil
doesn’t feel intimidated. After all, he knows plenty of guys from his oldI neighborhood who wheeledand-dealed their way into six figures. He certainly can handle one more
A big shot in a silk suit who
flashes a roll of bills and shows off his expensive modern furniture with mirrors and gadgets everyN
where you look.
,
When they arrive at the family estate in Connecticut, Phil looks for a Rolls-Royce parked in the
inally, the big day has come! Phil is
going home with Marilyn to meet
circular driveway, but he only sees a beat-up Jeep Cherokee, which must belong to one of the servants.
J by how shabby everything
Once inside, Phil is surprised by how simply the house is decorated and
seems. A faded Oriental rug covers the hall entryway and all of the furniture
A looks really old.
Phil is even more surprised when he meets Marilyn’s father, Mr. Caldwell.
M He had half expected
him to be wearing a tuxedo and holding a large brandy snifter like the rich people he’s seen in the
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movies. In fact, Phil had put on his best shiny Italian suit in anticipation, and he wore his large cubic
zirconium pinky ring so this guy would know that he had some money too. When Marilyn’s father
emerges from his study wearing an old rumpled cardigan sweater and tennis sneakers, Phil realizes
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he’s definitely not one of those guys from the old neighborhood.
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SECTION 4
Consumers and Subcultures
1
ECONsumer Behavior
OBJECTIVE
Why do both personal
and social conditions
influence how we spend
our money?
As Phil’s eye-opening experience at the Caldwells’ house
suggests, there are many ways to spend money and there’s
also a wide gulf between those who have it and those who
don’t. Perhaps an equally wide gap exists between those who
have had it for a long time and those who “made it the hard
way—by earning it!” This chapter begins as we briefly consider how general economic conditions affect the way we allocate our money. Then,
reflecting the adage that says “The rich are different,” we’ll explore how people who
occupy different positions in society consume in very different ways.
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Income Patterns
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A popular saying goes, “You can never be too thin or too rich.” Although conditions
I the average American’s standard of living continues to
are tenuous now, overall
improve—though manySconsumers don’t get a full ticket to The American Dream.
Two factors contribute to an (overall) upward trajectory: a shift in women’s roles and
increases in educationalTattainment.4
I
with preschool children are the fastest-growing segment of working
• Mothers
A
people. Furthermore, many of them work in high-paying occupations, such as
N
medicine and architecture,
which men used to dominate. Although women are
still a minority in most
professional
occupations, their ranks continue to swell.
,
•
The steady increase in the numbers of working women is a primary cause of the
rapid growth of middle- and upper-income families.
Education also determines
who gets a bigger piece of the economic pie.
J
Although picking up the tab for college often entails great sacrifice, it still pays
off in the long run. A
College graduates earn about 50 percent more than those
who have only goneM
through high school during the course of their lives. Women
without high school diplomas earn only 40 percent as much as women who have
I
a college degree.5 So, hang in there!
E
To Spend or Not to Spend, That Is the Question
5 and services depends both on our ability and our willConsumer demand for goods
ingness to buy. Whereas
5 demand for necessities tends to be stable over time, we
postpone or eliminate other expenditures if we don’t feel that now is a good time to
6
spend money.6 For example, you may decide to “make do” with your current clunker
for another year rather 7
than buy a new car right away. Even businesses like warehouse clubs that sell staples by the case feel the pain when shoppers postpone their
B
purchases; stores like Costco and Sam’s Club post big losses when people no longer
U and clothing even though sales of paper towels and
buy their discounted jewelry
pickles hold steady.7
Discretionary income is the money available to a household over and above
what it requires to have a comfortable standard of living. Economists estimate that
American consumers wield about $400 billion a year in discretionary spending
power. People aged 35 to 55, whose incomes are at a peak, account for about half of
this amount. As the population ages and income levels rise, the way a typical U.S.
household spends its money changes. The most noticeable shift is to allocate a
much larger share of its budget to shelter and transportation, and less to food and
apparel. (Note: This doesn’t mean that higher income households buy less food and
clothing—the proportion of dollars that goes toward these categories decreases.)
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
In the current dismal economic climate we have to
kick things off by acknowledging that recent changes in consumer
spending—prompted by numerous factors including frozen credit markets and massive
layoffs—almost overnight altered the landscape of consumer behavior. The “go go”
years seem like a distant memory as many
people suddenly put the brakes on their BUY
NOW mentality. Since the 1980s (when we
last experienced economic turbulence)
Americans’ savings rate dropped steadily—it
dipped to less than 1 percent in late 2008. In
a few short months this rate rocketed to 5
percent as people cut back wherever they
could. The new mantra: Make do with what
you have. Save. Question every expense—do
you really need that Starbucks latte, that $80
haircut, that fashion magazine? Thriftiness is
in, eye-popping bling is out. Even many fashionistas have turned into frugalistas—they refuse to sacrifice style but they achieve it on
a budget. Now it’s cool to visit Web sites
and blogs that celebrate frugality—like
Dollar Stretcher (stretcher.com), All Things
Frugal (allthingsfrugal.com), and Frugal Mom
(frugalmom.net).”1
Of course, it remains to be seen whether
this new frugality will persist when the economy improves (and it will). Young consumers
who have grown up with images of (if not actual) affluence and in-your-face bling may not
be prepared to pull such an abrupt aboutface. In one survey, 91 percent of young
adults say they have financial goals, but only
53 percent stick to a monthly budget—and 42
percent give themselves a grade of D or F to
describe how well they save.2
Contrary to popular wisdom, not everyone
suffers in a recession—and consumers don’t
uniformly cut back on their spending. Many of
them just reallocate their priorities (and perhaps buy less on credit). For now, which companies will feel the pain and which will actually gain? A few years ago Citigroup strategists
coined the term plutonomy to describe an
economy that’s driven by a fairly small number
of rich people. Taking a cue from the Standard
& Poor’s 500-stock index, they created a “basket” of luxury stocks like Bulgari, Porsche, and
Sotheby’s. Unfortunately many of those rich
people are a lot less rich today—and luxury
brands are hurting.
On the other hand another team of analysts created their own Poor Getting Poorer
Consumer Spending
and Economic Behavior
CHAPTER 12
Individual Attitudes Toward Money
Especially in the wake of the Great Recession of 2009, many consumers experience
doubts about their individual and collective futures, and they are anxious to hold on
to what they have. Of course, not everyone has the same attitudes about money and
its importance. We all know tightwads who hate to part with every penny (and who
actually experience emotional pain when they hand over their cash) and
spendthrifts who enjoy nothing more than when they buy everything in sight.
Research on this issue finds that (stereotypes aside), American tightwads outnumber spendthrifts. Men are more likely than women to be tightwads, as are older people and those with more education. How do we tell a tightwad from someone who’s
just being frugal? One of the researchers puts it this way: “The evidence suggests that
frugality is driven by a pleasure of saving, as compared with tightwaddism, which is
driven by a pain of paying.”8
C
Wal-Mart conducted a year of intensive research on its customers to better
HThe company now orunderstand how they think about money and brand names.
ganizes its products around the shopper groups it identified,
R which Wal-Mart says
represent the majority of its business. A separate team services each group across
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five so-called “power” product categories: food, entertainment, apparel, home
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goods and pharmacy.9 The three groups are:
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1 Brand aspirationals—People with low incomes who are obsessed with names
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such as KitchenAid
2 Price-sensitive affluents—Wealthier shoppers who love
Adeals
3 Value-price shoppers—Those who like low prices and cannot afford much more
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Money has many complex psychological meanings; we ,equate it with success or
failure, social acceptability, security, love, freedom and yes, even sex appeal.10 There
are therapists who specialize in treating money-related disorders, and they report that
some people even feel guilty about their success and deliberately
make bad investJ
ments to reduce this feeling! Some other clinical conditions include atephobia (fear of
A
being ruined), harpaxophobia (fear of becoming a victim of robbers), peniaphobia
(fear of poverty), and aurophobia (fear of gold).11 A recentM
study that approached
money as a social resource explored some interesting links between
our need for acI
ceptance and feelings about cash. In one case participants were either led to believe a
group had rejected them or that it had accepted them. ThenEthey completed a number of measures that reflected their desire for money. Those who the group rejected
expressed a greater desire for money. At another stage subjects counted either real
5
money or pieces of paper and then they experienced physical
pain. Those who
counted money reported they felt less pain than did those who
5 just counted paper!12
Income and Social Class
Index—this basket includes 22 stocks that include retailers, generic brands, repossession
agencies, dollar stores, and pawnshops that
prosper when others do worse. In a period
when the S&P declined by 40 percent, this index actually generated a positive return of
about 9 percent. Not everyone is hurting—as
consumers downscale their eating habits, for
example, fast-food chains like McDonald’s
pick up the surplus. People may not buy as
many expensive concert tickets, but they still
treat themselves to a movie—box office receipts are holding up well.
Finally, although people are a lot more
conscious of price, it’s not clear they’ve forsaken what was—before the recession hit—a
growing emphasis on corporate social responsibility. In one global survey about seven
in ten consumers said despite the recession
they have given just as much—or more—time
and money to causes they deem worthy and
more than half still are prepared to pay more
for a brand that supports a good cause.
Nearly 8 in 10 U.S. consumers who say they
are very anxious regarding their personal finances said they would switch to a brand that
supports good causes. As an aside, marketers have their work cut out for them if they
want to earn brand loyalty and do good at the
same time: Only one-third of the respondents
worldwide said they were aware of any brand
that supports a good cause!3
6
The field of behavioral economics, or economic psychology,
7 studies the “human”
side of economic decisions (including the decision-making biases we learned about
B
in Chapter 8). Beginning with the pioneering work of psychologist George Katona,
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this discipline studies how consumers’ motives and their expectations
about the fuConsumer Confidence
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ture affect their current spending, and how these individual decisions add up to affect a society’s economic well-being.13
Consumers’ beliefs about what the future holds are an indicator of consumer
confidence—this measure reflects how optimistic or pessimistic people are about
the future health of the economy and how they predict they’ll fare down the road.
These beliefs are important because they influence how much money people pump
into the economy when they make discretionary purchases.
Many businesses take forecasts about anticipated spending very seriously, and
periodic surveys “take the pulse” of the American consumer. The Conference Board
conducts a survey of consumer confidence, as does the Survey Research Center at
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
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Consumers and Subcultures
CB AS I LIVE IT
Dominique Dallas, University of Tennessee, Knoxville
by myself who acts like this. You
would think the way my friends carr y
themselves and spend money that
they have full-time jobs and receive
weekly bonuses. My friends rely on
their credit cards to live the way they
want. All in all, by spending money,
we prove we have access
C to a decent
amount of discretionar y income.
H y income, my
With this discretionar
friends and I purchase
R high-end
shoes, clothes, and jewelr y. On top
of that, we go out toIeat often to
restaurants like BlueSFin and Wasabi,
take road trips at least twice a
month to Atlanta andTGatlinburg, and
par ty hardy wheneverI we get the
chance! One could say as college
A enjoying the
students, we are simply
best years of our life,
Nbut how is it
possible to enjoy the best years of
, money or
one’s life without any
without being a par t of a higher
social class that can afford such
J our
things? It seems despite
financial state as students,
A
especially those with loans, it is
impor tant to display M
financial
stability and affluence
I through the
things we acquire. Nowadays, most
E cell phones,
students have their own
laptops, MP3 players, and other
gadgets. More so, we live in fully
5 and drive our
furnished apar tments
own cars. It seems society
has
5
manipulated even the broke college
6 this or that
kids to believe buying
A
s I roll over and rub sleep from
my eyes, I realize it is another
morning. My roommate is rather
quiet and the tenants above me are
not heavily walking back and for th.
This is a special morning! Birds are
chirping, the sun is peeking through
my window, and I am waking up, not
because of an alarm clock, but
because it is Saturday! Saturday
mornings are greeted with bright eyes
and grinning smiles because it
means three things: pancakes and
cheesy eggs for breakfast, a day at
the mall with the girls, and dinner
with the guys! I love pancakes, but
more so, I love shopping! It is the
per fect time to purchase a nice
blouse, or two, or three. My friends
always call me “spoiled” and “high
maintenance” because I am able to
buy what I want with few stipulations
when I go to the mall. While I have a
decent par t-time job and my parents
offer funds ever y now and then, I am
truly a “broke college kid.”
Meanwhile, who cares? Inevitably,
there exists the pressing issue to
look my best from head to toe and to
par ticipate in social activities
whether I have a well-paying job or
not. Never theless, it is not just me
represents our rank and social
status.
Discretionary income and status
symbols are the two concepts that are
directly related to my personal
example. My friends and I buy certain
things that prove us to be financially
able. Multiple purchases of these
items like DVDs, shoes, and food
mean we have money in the bank,
which relates us with a social class
that has a higher income. The other
concepts listed within Chapter 12
seem to hit the head on the nail.
There has always been a known
correlation between income and social
status and how certain materialistic
objects and activities indicate your
social class.
Nonetheless I still want nice things.
I want to look my best and enjoy the
finer things in life. It is as though we
are trained at birth to want nice,
luxury items because they are
associated with affluence, glamour,
and class. A marketer would be happy
to know that making a product seem
appealing in terms of luxury,
uniqueness, and sheer material
comfort will be very advantageous.
Society is filled with people who
naturally want the best. We seek
higher education, to land a better than
average job, that will pay an over-thetop salary, so we can ultimately live
comfortably to be a part of the upper
tier of the social hierarchy.
7
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the University of Michigan.
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consumers:14
Would you say that you and your family are better off or worse off financially
than a year ago?
Will you be better off or worse off a year from now?
Is now a good time or a bad time for people to buy major household items, such
as furniture or a refrigerator?
Do you plan to buy a car in the next year?
When, as now, people are pessimistic about their prospects and about the state
of the economy, they tend to cut back on what they spend and take on less debt.
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
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CHAPTER 12
However, when they are optimistic about the future, they reduce the amount they
save, take on more debt, and buy discretionary items. These factors influence the
overall savings rate:
1 Individual consumers’ pessimism or optimism about their personal circumstances such as a sudden increase in personal wealth as the result of an inheritance
2 World events such as the recession
3 Cultural differences in attitudes toward saving (e.g., the Japanese have a much
higher savings rate than do Americans)15
2
Social Class Structure
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OBJECTIVE
We divide all societies into the “haves” and the “have-nots”
How do we group
(though the amount people “have”H
is relative). The United
consumers into social
States is a place where “all men are R
created equal,” but even
classes that say a lot
so some people seem to be more equal than others. As Phil’s
I
about where they stand
encounter with the Caldwells suggests, a complex set of variin society?
ables, including income, family background,
and occupaS
tion determines his standing in society.
T
The place you occupy in the social structure helps to deI you spend it. Phil was
termine not only how much money you spend but also how
surprised that the Caldwells, who clearly had a lot of money,
Adid not seem to flaunt
it. This understated way of living is a hallmark of so-called “old money.” People who
have had it for a long time don’t need to prove they’ve got it.NIn contrast, consumers
who are relative newcomers to affluence might allocate their
, booty very differently.
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Pick a Pecking Order
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In many animal species, a social organization develops whereby the most assertive
A
or aggressive animals exert control over the others and have the first pick of food, living space, and even mating partners. Chickens, for example,
M exhibit a clearly defined dominance–submission hierarchy. Within this hierarchy, each hen has a posiI
tion in which she is submissive to all the hens above her and she dominates all the
E17
ones below her (hence the origin of the term pecking order).
People are not much different. We also develop a pecking order that ranks us
in terms of our relative standing in society. This rank determines our access to such
5 try to move up in
resources as education, housing, and consumer goods. People
the social order to improve their ranking. This desire to improve
one’s lot in life,
5
and often to let others know that one has done so, is at the core of many marketing
6
strategies.
Just as marketers carve society into groups for segmentation
7 purposes, sociologists describe divisions of society in terms of people’s relative social and economic
B
resources. Some of these divisions involve political power, whereas others revolve
U
around purely economic distinctions. Karl Marx, the nineteenth-century
economic
theorist, argued that a person’s relationship to the means of production determined
his position in a society. The “haves” control resources, and they use the labor of others to preserve their privileged positions. The “have-nots” depend on their own labor for survival, so these people have the most to gain if they change the system. The
German sociologist Max Weber showed that the rankings people develop are not
one dimensional. Some involve prestige or “social honor” (he called these status
groups), some rankings focus on power (or party), and some revolve around wealth
and property (class).18
We use the term social class more generally to describe the overall rank of people in a society. People who belong to the same social class have approximately
equal social standing in the community. They work in roughly similar occupations,
Income and Social Class
461
ECONsumer Behavior
It’s naïve to think that
everyone reacts the same
way to an economic downturn. The U.K.-based firm M&C Saatchi conducted research to identify eight specific
consumer segments that each display different attitudes and behaviors regarding spending and saving money:16
1 Crash Dieters (26 percent): Try to cut out
all nonessential spending until things
improve.
2 Scrimpers (13 percent): Want to maintain their lifestyle and are reluctant to
make sacrifices so they will trade down
to less expensive brands but not stop
buying what they like.
3 Abstainers (15 percent): Postpone big
purchases but look to buy things on
credit and pay later.
4 Balancers (9 percent): Sacrifice purchases in some categories in order to buy
things in others.
5 Treaters (12 percent): They know they
have to cut back but they have trouble
budgeting; so they reward themselves
when they do economize with small
treats.
6 Justifiers (12 percent): They are willing to
spend but they need a good reason to
buy something, such as a new model or a
deal.
7 Ostriches (9 percent): Are in denial;
they’re mostly younger consumers who
continue to buy as long as their credit
cards hold out.
8 Vultures (4 percent): Circle the market,
looking to snap up bargains as businesses offer bargain basement prices.
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,
This ad implies that there are social class
differences in leisure activities and preferred
beverages.
Source: Courtesy of Libbey Glass Co.
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and they tend to have similar lifestyles by virtue of their income levels and common
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tastes. These people tend to socialize with one another and share many ideas and
values regarding the way life should be lived.19
Indeed, “birds of a feather do flock together.” We tend to marry people in a sim5
ilar social class to ours, a tendency sociologists call homogamy, or “assortative mat5 of married high school dropouts marry someone who also
ing.” Well over 90 percent
dropped out or who has6only a high school diploma. On the other side of the spectrum, less than 1 percent of the most highly educated Americans have a spouse who
7 20
did not complete high school.
Social class is as much
B a state of being as it is of having: As Phil saw, class is also
a matter of what you do with your money and how you define your role in society.
U the idea that some members of society are better off or
Although we may not like
“different” from others, most consumers do acknowledge the existence of different
classes and the effect of class membership on consumption. As one wealthy woman
observed when researchers asked her to define social class:
In school, some kids seem to get all the breaks. They have access to many resources, such as special privileges, fancy cars, large allowances, or dates with other
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
I would suppose social class means where you went to school and how far. Your intelligence. Where you live. . . . Where you send your children to school. The hobbies you have.
Skiing, for example, is higher than the snowmobile. . . . It can’t be [just] money, because
nobody ever knows that about you for sure.21
CHAPTER 12
Income and Social Class
463
popular classmates. At work, some coworkers get promoted to high-prestige jobs
with higher salaries and perks such as a parking space, a large office, or the keys to
the executive washroom.
In virtually every context some people rank higher than others. Patterns of social
arrangements evolve whereby some members get more resources than others by
virtue of their relative standing, power, or control in the group.22 The process of social
stratification refers to this creation of artificial divisions: “. . . those processes in a social system by which scarce and valuable resources are distributed unequally to status positions that become more or less permanently ranked in terms of the share of
valuable resources each receives.”23 We see these distinctions both in RL and online
as the reputation economy takes shape—recall that this term refers to the “currency”
people earn when they post online and others recommend their comments.24
C
H agree that in many
Think back to groups to which you’ve belonged. You’ll probably
instances some members seem to get more than their fair share
R of bennies, whereas
other individuals aren’t so lucky. Some of these resources probably went to people
I
who earned them through hard work or diligent study, or achieved status. But someone may have gotten the goodies because she was lucky enough
S to be born with “a
silver spoon in her mouth.” Such good fortune reflects ascribed status.
T
Whether rewards go to the “best and the brightest” or to someone who happens
I a social group. Most
to be related to the boss, allocations are rarely equal within
groups exhibit a structure, or status hierarchy, where someAmembers are better off
than others. They may have more authority or power, or other members simply like
N
or respect them.
,
Achieved Versus Ascribed Status
In our society, wealth is more likely to be
earned than inherited.
Source: Courtesy of The Phoenix Companies, Inc.
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Consumers and Subcultures
Social Mobility
We’ve seen that worldwide there’s an upward drift in terms of access to consumer goods. But, to what degree do people actually move from one social class
to another? In some societies such as India it’s difficult to change one’s social
class, but in America we like to say, “Any man (or woman?) can grow up to be president” (though being related to a former president doesn’t hurt your chances).
Social mobility refers to the “passage of individuals from one social class to
another.”25
Horizontal mobility occurs when a person moves from one position to another
that’s roughly equivalent in social status; for instance a nurse becomes an elementary school teacher. Downward mobility is of course movement none of us wants but
unfortunately we observe this pattern fairly often as farmers and other displaced
workers go on welfare rolls
C or join the ranks of the homeless. By one estimate, between 2.3 million and 3.5 million Americans experience homelessness in a year’s
H
time.26
Despite that discouraging
trend, demographics decree that overall there must
R
be upward mobility in our society. The middle and upper classes reproduce less (i.e.,
I
have fewer children per family) than the lower classes (an effect demographers call
Sthey tend to restrict family size to below replacement level
differential fertility), and
(i.e., they often have only one child). Therefore, so the reasoning goes, over time
T
those of lower status must fill positions of higher status.27
Overall, though, theI offspring of blue-collar consumers are blue-collar, and the
offspring of white-collarAconsumers are white-collar.28 People do improve their positions over time, but these increases are not usually dramatic enough to catapult
N to another. The exception is when a person marries
them from one social class
someone considerably richer.
This “Cinderella fantasy” is a popular theme in our so,
ciety; we see it in movies (Pretty Woman or Maid in Manhattan) and popular TV
shows such as The Bachelor.
J
Class Structure inAthe United States
The United States in theory
M does not have a rigid, objectively defined class system.
Nevertheless, Americans tend to maintain a stable class structure in terms of inI
come distribution. Unlike some other countries, however, what does change are the
groups (ethnic, racial, E
and religious) that occupy different positions within this
structure at different times.29 A sociologist named W. Lloyd Warner proposed the
most influential classification of American class structure in 1941. Warner identified
5
six social classes:30
1
2
3
4
5
6
Upper upper
Lower upper
Upper middle
Lower middle
Upper lower
Lower lower
5
6
7
B
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These classifications imply that access to resources, such as money, education,
and luxury goods increases as you move up the ladder from lower lower to upper
upper. For example in 2006 (the most recent year where complete data are available) the richest 20 percent of U.S. households earned half of all the income. In contrast the poorest 20 percent received just over 3 percent. However these figures
don’t tell the whole story since some poorer families have access to nontaxable income or members may be between jobs so their low income is temporary. When
you adjust income for other factors and look at the data on a per person basis (while
on average 3.1 people live in a household in the top category, only 1.7 live in one in
CHAPTER 12
Income and Social Class
465
Figure 12.1 A CONTEMPORARY VIEW
OF THE AMERICAN CLASS STRUCTURE
INCOME
UPPER AMERICANS
Upper-Upper (0.3%): The “capital S society” world of inherited wealth
Lower-Upper (1.2%): The newer social elite, drawn from current professionals
Upper-Middle (12.5%): The rest of college graduate managers and professionals; lifestyle
centers on private clubs, causes, and the arts
MIDDLE AMERICANS
Middle Class (32%): Average pay white-collar workers and their blue-collar friends; live on
“the better side of town;” try to “do the proper things”
Working Class (38%): Average pay blue-collar workers; lead “working class lifestyle”
whatever the income, school, background, and job
C
LOWER AMERICANS
H
“A lower group of people, but not the lowest” (9%): Working, not on welfare; living standard
is just above poverty; behavior judged “crude,” “trashy”
R
“Real Lower-Lower” (7%): On welfare, visibly poverty-stricken, usually out of work (or have
“the dirtiest jobs”); “bums,” “common criminals”
I
S
T
I four times more than
the bottom category), the richest people actually consume
the poorest.31
A
Other social scientists have proposed variations on this system over the years,
Nabout class—although
but these six levels summarize fairly well the way we still think
the proportion of consumers who fall into each category fluctuates
over time. Fig,
ure 12.1 provides one view of the American status structure.
J
A
Every society has some type of hierarchical class structure that determines people’s
access to products and services. Let’s take a quick look at a M
few important ones.
I
China
E of more than 130 milIn China, an economic boom is rapidly creating a middle class
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Class Structure Around the World
lion people that analysts project will grow to more than 400 million in 10 years.
During the cultural revolution, Mao’s Red Guards seized on even the smallest
possessions—a pocket watch or silk scarf—as evidence of5“bourgeois consciousness.” Change came rapidly in the early 1990s, after Mao’s successor
Deng Xiaoping
5
uttered the phrase that quickly became the credo of the new China: “To get rich is
6
glorious.”
Because costs are low, a family with an annual income7below the U.S. poverty
threshold of about $14,000 can enjoy middle-class comforts, including stylish
B
clothes, Chinese-made color televisions, DVD players, and cell phones. Wealthier
Chinese entrepreneurs indulge in Cuban Cohiba cigars that
U sell for $25 each, a
quarter of the average Chinese laborer’s monthly wage. In bustling Shanghai,
newly minted “yuppies” drop their kids off for golf lessons; visit Maserati and
Ferrari showrooms; buy some luxury items from Louis Vuitton, Hugo Boss, or
Prada; then pick up some Häagen-Dazs ice cream before they head to an Evian spa
to unwind. One cultural difference that may help to account for this love of
branded goods is that Asians tend to be highly sensitive to cues that communicate
social standing, and well-known brand names help to manage this impression.
Indeed, even in the United States researchers report that Asian immigrants and
Asian Americans prefer branded goods to generic products compared to other
Americans.32
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Many companies, like this Austrian bank,
aggressively pursue the upper class
consumer.
Source: Courtesy of Bank Austria Creditanstalt AG.
Photo by Gunter Parth.
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Nike, which consumers in a survey named China’s coolest brand, profits mightI
ily from the rise of the Chinese middle class. Nike shoes are a symbol of success, and
the company opens an E
average of 1.5 new stores a day there. The company worked
for a long time to attain this status—it started when it outfitted top Chinese athletes
and sponsored all the teams in China’s pro basketball league. Still, becoming a fash5 consumers to spend twice the average monthly salary for
ion icon (and persuading
a pair of shoes) is no mean
5 feat in a country that’s not exactly sports crazy. So Nike
affiliated with the NBA (which began to televise games in China) and brought over
6 Jordan for visits. Slowly but surely, in-the-know Chinese
players such as Michael
33
came to call sneakers “Nai-ke.”
7
B
U
Japan is a highly brand-conscious
society where upscale, designer labels are incredJapan
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ISBN 1-256-36592-0
ibly popular. The Japanese love affair with top brands started in the 1970s when the
local economy was booming and many Japanese could buy Western luxury accessories for the first time. Some analysts say Japan’s long slump since that time may
have fostered a psychological need to splurge on small luxuries to give people the illusion of wealth and to forget their anxieties about the future. Single, working
women are largely responsible for fueling Japan’s luxury-goods spending—
about three-quarters of Japanese women aged 25 to 29 work outside the home.
As we saw in Chapter 10, these “office ladies” save money by living with their parents so this leaves them with cash on hand to spend on clothes, accessories, and
vacations.34
CHAPTER 12
The Middle East
In contrast to the Japanese, few Arab women work. This makes a search for the latest in Western luxury brands a major leisure activity for those with money. Dressing
rooms are large, with antechambers to accommodate friends and family members
who often come along on shopping sprees. A major expansion of Western luxury
brands is under way across the Middle East, home to some of the fashion industry’s
best customers. High-end retailers such as Saks Fifth Avenue and Giorgio Armani
operate opulent stores that cater to this growing market. However, fashion retailers
must take cultural and religious considerations into account. Missoni makes sure
that collections include longer pants and skirts, and evening gowns with light shawls
to cover heads or bare shoulders. And advertising and display options are more limited: Erotic images don’t work. In the strict religious culture of Saudi Arabia, mannequins can’t reveal a gender or human shape. At Saks’ Riyadh
C store, models are
headless and don’t have fingers. Half of the two-level store is off-limits to men.35
H
The United Kingdom
R
England is an extremely class-conscious country, and at least until recently inherI
ited position and family background largely predetermined consumption patterns.
S Eaton and Oxford and
Members of the upper class were educated at schools such as
they spoke like Henry Higgins in My Fair Lady. We can still find remnants of this rigid
T
class structure. “Hooray Henrys” (wealthy young men) play polo at Windsor and
I
hereditary peers still dominate the House of Lords.
However, the supremacy of inherited wealth appears to have
A faded in Britain’s traditionally aristocratic society as British entrepreneurs like Richard Branson (of the
N particularly hard hit by
Virgin empire) redefine the economy. The United Kingdom was
the recession, like the United States, and a new emphasis on
, frugality alters people’s
Income and Social Class
Marketing Pitfall
A recent flap illustrates
the rapid changes in
Indian society. Vogue
India ran a 16-page
spread of poor people surrounded by luxury
goods—an old toothless woman holds a child
who wears a Fendi bib, a woman and two
other people ride on a motorbike as she
sports a Hermès bag that sells for more than
$10,000, a street beggar grips a Burberry
umbrella. A columnist denounced the spread
as “. . . not just tacky but downright distasteful.” The magazine’s editor commented that
the shoot’s message is simply that “. . . fashion is no longer a rich man’s privilege. Anyone
can carry it off and make it look beautiful.”40
priorities. In addition populist outrage grew after it came to light in 2009 that legislators
had billed the government for excessive expenses—among other abuses, British taxpayers footed a £2,000 bill for one M.P. to clean the moat surrounding
his castle.36
J
Some big marketers such as Unilever and Groupe Danone set their sights on a
A
more lower-class group the British call chavs. This label refers to young, lower-class
men and women who mix flashy brands and accessories M
from big names such as
Burberry with track suits. Their style icons include soccer star
I David Beckham and
his wife, Victoria aka Posh Spice. Despite their (alleged) tackiness, marketers like
E on fashion, food, and
chavs because they spend a lot of their disposable income
gadgets. France’s Danone, which makes HP Sauce, a condiment the British have
poured over bacon sandwiches and fries for a century, launched a series of ads to
5 at a wedding buffet;
play up to the chav culture. One features a brawl over the sauce
another includes glammy soccer players’ wives mingling cattily
5 at a party.37 Danone
found “chavvy” people on the streets of Liverpool to star in the ads.
6
India
7
India’s economy is booming despite the global recession, and affluent consumers
B
prize higher-end global brands—even though nearly half of India’s population live
U Hermès scramble to
on less than $1.25 a day. Brands like Gucci, Jimmy Choo, and
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467
open stores in high-end hotels or new superluxury malls, where the management
often stations guards at the doors to keep the destitute outside.38
One of Bollywood’s biggest stars, Shahrukh Khan, is “brand ambassador” for Tag
Heuer watches, which cost thousands of dollars. He gives them away on the Indian
version of Who Wants to Be a Millionaire?—the show that also formed the basis for
the hit movie Slumdog Millionaire. India’s ascendancy is fairly recent; for decades
after the country became independent from Britain its economy was socialistic and
traditional. Today, young consumers watch MTV, read international fashion magazines, and embrace the power of plastic—credit-card spending in India rose by 30
percent a year for the past 5 years.39
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Vogue India’s emphasis on fashion and
luxury illustrates the stark divisions between
the haves and the have-nots in that
developing country.
Source: Courtesy of Newscom.
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Social
Class and Consumer Behavior
OBJECTIVE
It’s getting more difficult to clearly link certain brands or
5
stores
with a specific class. Marketplace changes make it
more
difficult
for the casual observer to accurately place a
5
consumer in a certain class by looking at the products he
6 That’s because a lot of “affordable luxuries” now are
buys.
within
reach of many consumers who could not have ac7
quired them in the past. Think of how many college women
B
you know who buy pricey bags from Louis Vuitton or Coach,
U eat Ramen noodles for dinner. To make matters even
then
more confusing, a wealthy family may well buy its wine at
Costco and its bath towels at Target—and especially in today’s economy proudly
gloat about the steals they got.41 Luxury brands slash prices to attract more customers, while mass-market brands move upscale—Disney’s new Disney Couture
line sells cashmere sweaters “inspired by Tinker Bell,” pricey chandeliers patterned
after the Art Deco décor in Mr. Disney’s former office, and a $1,400 sequined Mickey
Mouse T-shirt from Dolce & Gabbana.42
Profound changes in global income distribution drive this shift. Traditionally, it
was common to find a huge gulf between the rich and the poor—you were either one
or the other. Today, rising incomes in many economically developing countries, such
as South Korea and China, coupled with decreasing prices for quality consumer goods
Why does a person’s
desire to make a
statement about his social
class, or the class to which
he hopes to belong,
influence the products he
likes and dislikes?
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CHAPTER 12
Income and Social Class
and services, level the playing field. The current recession aside, more and more consumers around the globe participate in the global economy. The biggest emerging
markets go by the acronym BRIC: Brazil, Russia, India, and China. These four countries today account for 15 percent of the $60 trillion global economy, but analysts project they will overtake the European and American economies within 20 years.43
This change fuels demand for mass-consumed products that still offer some degree of panache. Companies such as H&M, Zara, EasyJet, and L’Oréal provide creature comforts to a consumer segment analysts label mass class. This refers to the
hundreds of millions of global consumers who now enjoy a level of purchasing
power that’s sufficient to let them afford high-quality products—except for bigticket items such as college educations, housing, or luxury cars. The mass-class market, for example, spawned several versions of affordable cars: Latin Americans have
their Volkswagen Beetle (they affectionately call it el huevito,
C“the little egg”); Indian
consumers have their Maruti 800 (it sells for as little as US $4,860); and the Fiat Palio,
H
the company’s “world car,” targets people in emerging countries
such as Brazil,
44
Argentina, India, China, and Turkey.
R
I
S
When we think about a person’s social class, we consider a number of pieces of
T
information. Two major ones are occupation and income. Let’s take a quick look
I
at both.
A
Occupational Prestige
N extent by what they
In a system in which (like it or not) we define people to a great
do for a living, occupational prestige is one way we ,evaluate their “worth.”
Components of Social Class
Hierarchies of occupational prestige tend to be quite stable over time and across
cultures. Researchers find similarities in occupational prestige in countries as diverse as Brazil, Ghana, Guam, Japan, and Turkey.45
J
A typical ranking includes a variety of professional and business occupations at
A
the top (e.g., CEO of a large corporation, physician, and college professor), whereas
jobs that hover near the bottom include shoe shiner, ditch M
digger, and garbage collector. Because a person’s occupation links strongly to his or her use of leisure time,
I
allocation of family resources, aesthetic preferences, and political orientation, many
Eclass.
social scientists consider it the single best indicator of social
Income
5
The distribution of wealth is of great interest to social scientists
and to marketers
because it determines which groups have the greatest buying
power
and market
5
potential. Wealth is by no means distributed evenly across the classes. As we
6 of social class behave seen, income per se is not often a very good indicator
cause the way we spend our money is more telling than
7how much we spend.
Still, people need money to obtain goods and services to express their tastes, so
B
obviously income is still very important. American consumers are getting both
U
wealthier and older, and these changes will continue to influence
consumption
preferences.
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How Income Relates to Social Class
Although we equate money with class, the precise relationship between other aspects of social class and income is not clear, and social scientists debate it.46 The two
are by no means synonymous, which is why many people with a lot of money try to
buy their way into a higher social class. One problem is that even if a family adds one
or more wage earners and increases its household income, each additional job is
likely to be lower in status than the primary wage earner’s job. In addition, these
members don’t necessarily pool their earnings toward the common good of the
family.47
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Consumers and Subcultures
So which is a better predictor of consumer behavior? The answer partly depends
on the type of product we sell—do people buy it largely for its functional value (what
it does) or for its symbolic value (the impression it conveys to others)?
•
•
•
Social class is a better predictor of purchases that have symbolic aspects, but low
to moderate prices (e.g., cosmetics, liquor).
Income is a better predictor of major expenditures that do not have status or
symbolic aspects (e.g., major appliances).
We need both social class and income data to predict purchases of expensive,
symbolic products (e.g., cars, homes).
Class Differences in Worldview
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ISBN 1-256-36592-0
A worldview is one way to
Cdifferentiate among social classes. To generalize, the world of
the working class (i.e., the lower-middle class) is more intimate and constricted. For exH are likely to name local sports figures as heroes and are less
ample, working-class men
likely to take long vacation
R trips to out-of-the-way places.48 Immediate needs, such as
a new refrigerator or TV, tend to dictate buying behavior, whereas the higher classes foI
cus on more long-term goals, such as saving for college tuition or retirement.49
Working-class consumers
Sdepend heavily on relatives for emotional support and tend
to orient themselves in terms of the local community rather than the world at large.
T
They are more likely to be conservative and family oriented. Maintaining the appearI
ance of one’s home and property
is a priority, regardless of the size of the house.
One recent study that
looked
at social class and how it relates to consumers’
A
feelings of empowerment reported that lower-class men aren’t as likely to feel they
have the power to affectNtheir outcomes. Respondents varied from those who were
what the researcher calls
, potent actors (those who believe they have the ability to
take actions that affect their world) to impotent reactors (those who feel they are at
the mercy of their economic situations). This orientation influenced consumption
behaviors; for example,Jthe professionals in the study who were likely to be potent
actors set themselves up for financial opportunity and growth. They took very broad
A
perspectives on investing and planned their budgets strategically.50
Although they would
Mlike to have more in the way of material goods, workingclass people do not necessarily envy those who rank above them in social standing.51
I
They may not view the maintenance of a high-status lifestyle as worth the effort. As
E commented, “Life is very hectic for those people. There
one blue-collar consumer
are more breakdowns and alcoholism. It must be very hard to sustain the status, the
clothes, and the parties that are expected. I don’t think I’d want to take their place.”52
5 right. Although good things appear to go hand-in-hand
This person may be
with higher status and wealth,
the picture is not that clear. The social scientist Émile
5
Durkheim observed that suicide rates are much higher among the wealthy; he wrote
6 of most comfort suffer most.”53 Durkheim’s wisdom may
in 1897, “The possessors
still be accurate today. Many
7 well-off consumers seem to be stressed or unhappy despite or even because of their wealth, a condition some call affluenza.54 A New York
B
Times/CBS News poll asked kids aged 13 to 17 to compare their lives with what their
U up. Forty-three percent said they had a harder time,
parents experienced growing
and upper-income teenagers were the most likely to say that their lives are harder
and subject to more stress. Apparently, they feel the pressure to get into elite schools
and to maintain the family’s status.55
Many marketers try to target affluent, upscale markets. This often makes sense
because these consumers—those who are still employed in the aftermath of the
recession—obviously have the resources to spend on costly products that command
higher profit margins. However, it is a mistake to assume that we should place everyone with a high income into the same market segment. As we noted earlier, social
class involves more than absolute income. It is also a way of life, and factors including where they got their money, how they got it, and how long they have had it significantly affect affluents’ interests and spending priorities.56
CHAPTER 12
Income and Social Class
471
CB AS I SEE IT
Professor George Loewenstein, Carnegie Mellon University
T
he average American spends more
on lottery tickets than on reading
materials or movies. In 2003, total
spending on lotteries was almost $45
billion, or $155 for every man, woman,
and child in the United States.
Moreover, people at low income levels
play the lottery disproportionately; one
study found that those with incomes
under $10,000 spent almost three
times as much on lottery tickets as
those with incomes over $50,000.
Why is playing the lottery so
attractive, and why is it especially
attractive to low-income individuals?
My colleagues Emily Haisley and
Romel Mostafa and I explored these
questions. We hypothesized that one
of the attractions of the lottery is that
the typical lottery ticket only costs a
dollar—peanuts in the budget of even
those with low incomes. We went to
the Greyhound bus station in
Pittsburgh and asked bus travelers if
they would complete a survey about
their attitudes toward Pittsburgh in
exchange for $5. We then gave them
the opportunity to purchase up to five
lottery tickets. For some subjects, we
handed them the $5 and had them
make a single choice of how many
tickets to buy (from zero to five). For
other subjects, we handed them $1 at
a time, five times in a row, and each
time asked if they wanted to use the
dollar to buy a lottery ticket. Subjects
in the latter condition purchased about
twice as many lottery
C tickets. Of
course $1 isn’t much, but as the
H many people are
statistics document,
forking out the money
R day after day.
This helps to explain the appeal of
the lottery, whichI is the single most
popular form of gambling
in the United
S
States despite having the lowest
payout rate. But, T
this finding does not
explain why low-income
individuals are
I
so attracted to playing the lottery. In
A we attempted to
two follow-up studies
find out. We reasoned
N that poor
people play the lottery
, because, in
disproportionately
contrast to more affluent people, it is
their only opportunity, however small,
J
for a dramatic improvement
in their
economic situation.
In
the
first
study
A
we made some Greyhound riders feel
M in the survey to
rich by asking them
report their income
I on a scale that
went up in $10,000 increments,
E or more. We
peaking at $50,000
made others feel poor by asking
income with a scale that went up in
5 peaking at
$50,000 increments,
$1,000,000 or more.
5 Those made to
feel poor bought, on average, about
twice as many tickets. In the second
study we reasoned that lottery tickets
might be attractive to people with low
incomes because they have the same
opportunity to win as people with
higher incomes (in contrast to other
areas of life where rich people have
advantages). We reminded them of
this fact by asking them to report
whether poor people, rich people, or
neither had an advantage in different
areas of life, with one of the areas
being “gambling.” Those respondents
who received this subtle reminder that
lotteries give everyone similar odds of
winning once again bought more.
The sad fact is that lotteries return
only fifty cents on the dollar, making
them one of the worst possible
investments, and far less lucrative
than playing the stock market—even
in a bad year. Yet 21 percent of
Americans, and 38 percent of those
with incomes less than $25,000—
report that the lottery is the only way
they would be able to accumulate
several thousand dollars for
retirement. Along with payday loans,
rent-to-own establishments, pawn
shops, and instant rebate tax
services, lotteries are one of the many
ways that commercial and state
enterprises may be detrimental to the
financial well-being of the poor.
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Despite our stereotype of rich people who just party all day long, one study
B
found the typical millionaire is a 57-year-old man who is self-employed, earns a meU same wife for most of
dian household income of $131,000, has been married to the
his adult life, has children, has never spent more than $399 on a suit or more than
$140 for a pair of shoes, and drives a Ford Explorer (the humble billionaire investor
Warren Buffett comes to mind). Interestingly, many affluent people don’t consider
themselves to be rich. One tendency researchers notice is that they indulge in luxury goods while they pinch pennies on everyday items—they buy shoes at Neiman
Marcus and deodorant at Wal-Mart, for example.57
SBI Consulting Business Intelligence divides consumers into three groups
based on their attitudes toward luxury:
1 Luxury is functional—These consumers use their money to buy things
that will last and have enduring value. They conduct extensive prepurchase
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Net Profit
ASmallWorld.net is a social
networking site that gives
the wealthy access to one
another in cyberspace—while
keeping the rest of us out. It’s an invitationonly site that’s grown to about 150,000 registered users. The site’s founders promote it
as a Facebook for the social elite. A few recent postings help to understand why. One
person wrote, “I need to rent 20 very luxury
sports cars for an event in Switzerland. . . .
The cars should be: Maserati—Ferrari—
Lamborghini—Aston Martin ONLY!” Another
announced: “If anyone is looking for a private
island, I now have one available for purchase
in Fiji.” The rich are different.58
research and make logical decisions rather than emotional or impulsive
choices.
2 Luxury is a reward—These consumers tend to be younger than the first group
but older than the third group. They use luxury goods to say, “I’ve made it.” The
desire to be successful and to demonstrate their success to others motivates
these consumers to purchase conspicuous luxury items, such as high-end automobiles and homes in exclusive communities.
3 Luxury is indulgence—This group is the smallest of the three and tends to include younger consumers and slightly more males than the other two groups.
To these consumers, the purpose of owning luxury is to be extremely lavish and
self-indulgent. This group is willing to pay a premium for goods that express
their individuality and make others take notice. They have a more emotional approach to luxury spending
and are more likely than the other two groups to
C
make impulse purchases.59
H
As Phil discovered, R
people who have had money for a long time use their fortunes a lot differently. Old money families (e.g., the Rockefellers, DuPonts, Fords,
I
etc.) live primarily on inherited funds.60 One commentator called this group “the
class in hiding.”61 Following
S the Great Depression of the 1930s, moneyed families
became more discreet about exhibiting their wealth. Many fled from mansions such
T
as those we still find in Manhattan (the renovated Vanderbilt mansion now is Ralph
Lauren’s flagship store) Ito hideaways in Virginia, Connecticut, and New Jersey.
Mere wealth is not sufficient
to achieve social prominence in these circles. You
A
also need to demonstrate a family history of public service and philanthropy, and
Ncontributions often enable donors to achieve a kind of imtangible markers of these
mortality (e.g., Rockefeller
, University, Carnegie Hall, or the Whitney Museum).62
“Old money” consumers distinguish among themselves in terms of ancestry and
lineage rather than wealth.63 And (like the Caldwells) they’re secure in their status.
In a sense, they have trained
J their whole lives to be rich.
In contrast to people with old money, today there are many people—including
A
high-profile billionaires such as Bill Gates, Steve Jobs, and Richard Branson—who
are “the working wealthy.”
M64 The Horatio Alger myth, where a person goes from “rags
to riches” through hard work and a bit of luck, is still a powerful force in our society.
I
That’s why a commercial that showed the actual garage where the two cofounders of
E struck a chord in so many.
Hewlett-Packard first worked
Although many people do in fact become “self-made millionaires,” they often
encounter a problem (although not the worst problem one could think of!) after they
5 change their social status. The label nouveau riche dehave become wealthy and
scribes consumers who5
recently achieved their wealth and who don’t have the benefit of years of training to learn how to spend it.
6 riches; many suffer from status anxiety. They monitor the
Pity the poor nouveau
cultural environment to
7 ensure that they do the “right” thing, wear the “right”
clothes, get seen at the “right” places, use the “right” caterer, and so on.65 Their flamB
boyant consumption is an example of symbolic self-completion because they try to
U have “class” to make up for an internal lack of assurdisplay symbols they believe
ance about the “correct” way to behave.66 In major Chinese cities such as Shanghai,
some people wear pajamas in public as a way to flaunt their newfound wealth. As
one consumer explained, “Only people in cities can afford clothes like this. In farming villages, they still have to wear old work clothes to bed.”67
A taste culture describes consumers in terms of their aesthetic and intellectual preferences. This concept helps to illuminate the important, yet sometimes-subtle, distinctions in consumption choices among the social classes.68 For example, a comprehensive analysis of social class differences using data from 675,000 households
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
“What Do You Use That Fork For?” Taste Cultures, Codes,
and Cultural Capital
CHAPTER 12
Income and Social Class
supports the mass-class phenomenon we discussed before: Differences in consumption patterns between the upper and upper-middle classes and between the
middle and working classes are disappearing. However, strong differences still
emerge in terms of how consumers spend their discretionary income and leisure
time. Upper- and upper-middle-class people are more likely to visit museums and
attend live theater, and middle-class consumers are more likely to camp and fish.
The upper classes are more likely to listen to all-news programs, whereas the middle classes are more likely to tune in to country music.69
Some social critics don’t like the taste culture perspective because they charge
it’s elitist. Judgments of the relative artistic value of Beethoven versus The Beastie
Boys aside, it is very helpful to recognize that we segment ourselves in terms of our
shared tastes in literature, art, music, leisure activities, and home decoration.
Indeed, all of the thousands of online brand communitiesCwe discussed in Chapter 10 are living evidence that we do this all the time!
H researchers cataloged
In one of the classic studies of social differences in taste,
home owners’ possessions as they sat in their living roomsRand asked them about
their income and occupation. They identified clusters of furnishings and decorative
I
items that seemed to appear together with some regularity, and they found different
clusters depending on the consumer’s social status (see Figure
S 12.2). For example,
Figure 12.2 LIVING ROOM CLUSTERS AND SOCIAL CLASS
T
I
A
N
Traditional
,
+500
14 Curtains
translucent
Low
Social
Status
3 Carpet
design
floral
–500
8 Furniture bulky
5 Bright
walls
J
A
38 Wall
M
mirror
43 Still-life
print
36 Clock,I
45 Artificial
other
flowers
44E
Cut
29 Religious objects
11 Furniture
French
9 Furniture traditional
28 Candleholder
46 Small potted plant
25 Piano
flowers
32 Photographs
19 General
space
dense
49 Antimacassars
48 Trophies
30 Bible
42 Religious painting
50
Dogs/animals
26 Television
2 Carpet
1 Floor
53 House below average
10 Furniture mixed
23 Furniture below average
21 Disorder
24 Fireplace
6 Walls wood
Very neat
22 Excellent condition
15 Curtains plain
32 Knicknacks
5
5
6
7
B
U
20
39 Outdoor paintings
12 Docks
47 Large potted plants
37 Picture windows
+500
34 Encyclopedia
27 Hi-Fi
13 Number of
windows
35 Clock, sunburst
52 Organ
High
Social
Status
41 Abstract painting
51 Sculpture
7 Furniture
modern
16 Curtains
floral
4 Carpet solid
ISBN 1-256-36592-0
17 Curtains geometric
18
General space
bare
–500
Modern
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Consumers and Subcultures
Many consumers still covet luxury products—
whether they can afford them or not.
Source: Courtesy of Harry Winston Jewelers.
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,
J
A
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#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
they tended to find a cluster that consisted of religious objects, artificial flowers, and
5 lower-status living rooms, whereas they were likely to
still-life portraits in relatively
catalog a cluster of abstract
5 paintings, sculptures, and modern furniture in a higherstatus home.70
6 social class focuses on the codes (the ways consumers exAnother approach to
press and interpret meanings)
people within different social strata use. It’s valuable
7
for marketers to map these codes because they can use concepts and terms that tarB
get customers will relate to. Marketing appeals we construct with class differences
U
in mind result in quite different
messages. For example, a life insurance ad a company targets to a lower-class person might depict in simple, straightforward terms a
hard-working family man who feels good immediately after he buys a policy. A more
upscale appeal might depict a more affluent older couple surrounded by photos of
their children and grandchildren. It might include extensive copy that plugs the satisfaction of planning for the future.
These two ways to communicate product benefits incorporate different types of
codes. Restricted codes focus on the content of objects, not on relationships among
objects. Elaborated codes, in contrast, are more complex and depend on a more sophisticated worldview. These code differences extend to the way consumers approach basic concepts such as time, social relationships, and objects. Table 12.1
summarizes some differences between these two code types.
CHAPTER 12
TABLE 12.1
Income and Social Class
Effects of Restricted Versus Elaborated Codes
Restricted Codes
Elaborated Codes
Emphasize description and contents of objects
Have implicit meanings (context dependent)
Emphasize analysis and interrelationship between objects;
i.e., hierarchical organization and instrumental connections
Have explicit meanings
Language
Use few qualifiers, i.e., few adjectives or adverbs
Use concrete, descriptive, tangible symbolism
Have language rich in personal, individual qualifiers
Use large vocabulary, complex conceptual hierarchy
Social relationships
Stress attributes of individuals over formal roles
Stress formal role structure, instrumental relationships
Time
Focus on present; have only general notion of future
Focus an instrumental relationship between present
activities and future rewards
Physical space
Locate rooms, spaces in context of other rooms and
places: e.g., “front room,” “corner store”H
General characteristics
Implications for marketers
C
R(or
Stress inherent product quality, contents
trustworthiness, goodness of “real-type”),
I
spokesperson
Stress implicit of fit of product with total
Slifestyle
Use simple adjectives, descriptions
Identify rooms, spaces in terms of usage; formal ordering
of spaces; e.g., “dining room,” “financial district”
Stress differences, advantages vis-à-vis other products in
terms of some autonomous evaluation criteria
Stress product’s instrumental ties to distant benefits
Use complex adjectives, descriptors
T
Source: Adapted from Jeffrey F. Durgee, “How Consumer Sub-Cultures Code Reality: A ILook at Some Code Types,” in Richard J. Lutz, ed., Advances in Consumer Research, 13
(Provo, UT: Association of Consumer Research, 1986): 332.
A
N
Clearly, not all taste cultures are created equal. The upper
, classes have access to
resources that enable them to perpetuate their privileged position in society. Pierre
Bourdieu was a French theorist who wrote at length about how people compete for
resources, or capital. Bourdieu did large-scale surveys to track
J people’s wealth, and
he related this “economic capital” to patterns of taste in entertainment and the arts.
A
He concluded that “taste” is a status-marking force, or habitus, that causes consumption preferences to cluster together. Later analyses M
of American consumers
largely confirm these relationships; for example, higher-income people are more
I
likely than the average consumer to attend the theater, whereas lower-income peoE
ple are more likely to attend a wrestling match.71
In addition to economic capital (financial resources), Bourdieu pointed to the
significance of social capital (organizational affiliations and networks). The legions
5 so much business
of aspiring professionals who take up golf because they conduct
on the greens demonstrate how social capital operates. Similarly,
as we’ve seen, re5
spected bloggers acquire social capital when they gain access to business contacts
6
who go online to search for information and advice.72
Bourdieu also reminds us of the consequences of cultural
7 capital. This refers to
a set of distinctive and socially rare tastes and practices—knowledge of “refined” beB
havior that admits a person into the realm of the upper class.73 The elites in a society collect a set of skills that enable them to hold positionsU
of power and authority,
and they pass these on to their children (think etiquette lessons and debutante
balls). These resources gain in value because class members restrict access to them.
That’s part of the reason why people compete so fiercely for admission to elite colleges. Much as we hate to admit it, the rich are different.
ISBN 1-256-36592-0
475
Status Symbols
We tend to evaluate ourselves, our professional accomplishments, our appearance,
and our material well-being relative to others. The popular phrase “keeping up with
the Joneses” (in Japan it’s “keeping up with the Satos”) refers to a desire to compare
your standard of living with your neighbors—and exceed it if you can.
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Luxury items like diamond engagement rings
are valued as status symbols the world over,
as this Brazilian ad for a jeweler reminds us.
Source: Courtesy of Saatchi & Saatchi/Brazil.
C
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,
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Often it’s not enough to have wealth or fame—what matters is that you have
B
more of it than others. One study demonstrated how we assign value to loyalty proU award you special status based on the number of miles
grams (e.g., when airlines
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
you fly) at least in part based on our level in the hierarchy relative to other members.
Subjects were assigned to “gold status” in a program where they were in the only tier
or a program where there was also a silver tier. Although both groups were “gold,”
those in the program that also offered a lower level felt better about it.74
A major motivation to buy is not to enjoy these items but rather to let others know
that we can afford them. These products are status symbols. The popular bumper
sticker slogan, “He who dies with the most toys, wins,” summarizes the desire to accumulate these “badges of achievement.” Status-seeking is a significant source of
motivation to procure appropriate products and services that we hope will let others
know we’ve “made it.” A recent study demonstrated how people turn to status symbols to prop up their self-concepts, especially when they feel badly or uncertain about
CHAPTER 12
other aspects of their lives. When subjects in auctions were made to feel that they had
little power, they spent more to purchase items to compensate for this deficit.75
We associate status symbols with luxury products, but the reality is that consumers are very good at latching onto all sorts of things that enable them to proclaim their place in a pecking order. In cyberspace, Twitter is the status vehicle du
jour as actors, politicians, athletes, and millions of the rest of us hop on board the
140-character train. Celebrities including bicyclist Lance Armstrong, actor Ashton
Kutcher, basketball player Shaquille O’Neal, and even Oprah are enthusiastic passengers. This social media platform is a way to stay informed, build a following, and
perhaps prove that you’re cool enough to be a Twitterer. A tweet by design diva
Martha Stewart illustrates the “me too” motivation: “Proving that I really am on
Twitter!”76
As we discussed earlier in the chapter, the rise of a mass-class
C market means that
many luxury products have gone down-market. Does this mean Americans no
H to roll out ever-pricier
longer yearn for status symbols? Hardly. The market continues
goods and services, from $130,000 Hummers and $12,000R
mother–baby diamond
tennis bracelet sets to $600 jeans, $800 haircuts, and $400 bottles of wine. Although
I
it seems that almost everyone can flout a designer handbag (or at least a counterfeit
version with a convincing logo), our country’s wealthiest consumers
employ 9,000
S
personal chefs, visit plastic surgeons, and send their children to $400-an-hour math
T
tutors. A sociologist explained, “Whether or not someone has a flat-screen TV is going to tell you less than if you look at the services they use,I where they live and the
control they have over other people’s labor, those who are serving
A them.”79
Of course, the particular products that count as status symbols vary across culN
tures and locales:
•
•
•
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•
,
Although to most Americans the now-defunct Hummer vehicle is a symbol of excess, Iraqis still regard the huge gas-guzzlers as an alluring symbol of power. An
Iraqi Hummer dealer observed, “In Iraq, people judge you
J by your car, and you’re
not a man without one.” People there use an Arabic phrase to explain the need to
A
have the biggest car—hasad thukuri, which roughly translates as “penis envy.”80
In China, children are status symbols (partly because the
M government strongly
discourages couples from having more than one baby). Parents want to show off
I
their pampered child and are eager to surround their “little emperors” with luxEof their disposable inury goods. Chinese families spend one-third to one-half
come on their children.81
Largely because of an oil boom, there are at least 25 billionaires and 88,000 mil5bite out of the Russian
lionaires in Russia (though the recession has taken a big
economy also). Muscovites crave luxury goods to show
5 off their newfound
wealth. Some buy the GoldVish cell phone that glitters with 120 carats of dia6 as much as possible
monds encrusting a case of white gold. The desire to spend
on indulgences fuels a popular joke in Moscow: A wealthy
7 businessman tells a
friend he bought a tie for $100. He responds, “You fool. You can get the same tie
B
for $200 just across the street.”82
Ua status symbol (see
In Indonesia, as in many countries, a cell phone is
Marketing Pitfall box)—but instead of a sleek iPhone, a decade-old Nokia model
users call “the Brick” is the one to have. This “smart phone” never took off in the
West—its bulky design makes it look dated. But in Jakarta, its heft is what people
like about it. At a whopping half-pound, it doesn’t fit into a pocket so it’s very visible when models, politicians, and other celebrities cart it around with them.
Nokia even sells a gold-plated version for $2,500. In the world of status symbols,
anything goes as long as others don’t have it.83
Income and Social Class
477
Marketing Pitfall
Think about those of us
who suffer from cell
phone envy: Did you
stake out your place in
line when Apple first released its coveted
iPhone? British researchers observed how
men in clubs used their phones as part of
“the mating ritual.” Whereas female patrons
generally kept their phones in their purses
and retrieved them only when needed, most
men took their phones out of their jacket
pockets or briefcases when they sat down and
placed them on the bar counter or table for all
to see.
The authors propose that men use their
mobile phones just as peacocks use their
plumage or male bullfrogs use their croaks—
to advertise their status to available mates.
They noted that the amount of time the men
spent toying with and displaying their phones
increased significantly as the number of men
relative to women increased—just as male
peacocks fan open their feathers more vigorously as the number of competing suitors
increases.77
Today, the average cell phone user replaces his phone in less than 2 years, and
many aficionados pant for a new model much
sooner than that. It’s not about function; it’s
about fashion and the next best thing.
Motorola learned about the status value of
phones when its fortunes plunged along with
the price of its Razr model (a 30 percent drop
in stock price in 6 months). Although the Razr
was a big hit when Motorola launched it, the
company sat on its laurels and didn’t realize
that customers soon would crave the latest
and greatest. As one industry analyst stated,
“Phone manufacturers are only as hot as their
last major hit—if they haven’t smacked it over
the fence in a while, they’re in trouble.
Motorola failed to follow it up with something
similarly as big as the Razr.” Motorola hoped
that its newer Krzr model would lure back
style-conscious consumers because it’s got
better functionality than the Razr. But the Krzr
also looks a lot like a Razr and analysts doubt
that phoneaholics are going to buy into a
product that looks like it’s so yesterday.78
The social analyst Thorstein Veblen first discussed the motivation to consume
for the sake of consuming at the turn of the twentieth century. For Veblen, we buy
things to create invidious distinction—this means we use them to inspire envy in
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Marketing Opportunity
There were tales, repeated in the newspapers, of dinners on horseback; of banquets for
pet dogs; of hundred-dollar bills folded into guests’ dinner napkins; of a hostess who attracted attention by seating a chimpanzee at her table; of centerpieces in which lightly
clad living maidens swam in glass tanks, or emerged from huge pies; of parties at which
cigars were ceremoniously lighted with flaming banknotes of large denominations.84
C
H lived it up back in the old days, right? Well, maybe the
Sounds like they really
more things change, theR
more they stay the same: The recent wave of corporate scandals involving companies such as AIG, Enron, WorldCom, and Tyco infuriated many
I
consumers when they discovered that some top executives lived it up even as other
employees were laid off.SOne account of a $1 million birthday party the chief executive of Tyco threw for his wife is eerily similar to a robber baron shindig: The party reT
portedly had a gladiator theme and featured an ice sculpture of Michelangelo’s
I from his penis into crystal glasses. The company also
David with vodka streaming
furnished the executive’s
A New York apartment with such “essentials” as a $6,000
shower curtain, a $2,200 gilt wastebasket, and a $17,100 “traveling toilette box.”85
This phenomenon N
of conspicuous consumption was, for Veblen, most evident
among what he termed ,the leisure class, people for whom productive work is taboo.
In Marxist terms, such an attitude reflects a desire to link oneself to ownership or
control of the means of production, rather than to the production itself. Those who
control these resources,Jtherefore, avoid any evidence they actually have to work for
a living, as the term the idle rich suggests.
A
To Veblen, wives are an economic resource. He criticized the “decorative” role of
women as rich men showered
M them with expensive clothes, pretentious homes, and a
life of leisure as a way to advertise their own wealth (note that today he might have arI
gued the same for a smaller number of husbands). Fashions such as high-heeled shoes,
E on dresses, and elaborate hairstyles all conspired to entight corsets, billowing trains
sure that wealthy women could barely move without assistance, much less perform
manual labor. Similarly, the Chinese practice of foot-binding prevented female mem5 walking, and servants carried them from place to place.
bers of the aristocracy from
Veblen’s inspiration5came from anthropological studies he read of the Kwakiutl
Indians, who lived in the Pacific Northwest. At a potlatch ceremony, the host showed
off his wealth and gave 6
extravagant presents to the guests. The more he gave away,
the greater his status. Sometimes,
the host employed an even more radical strategy
7
to flaunt his wealth. He would publicly destroy some of his property just to demonB
strate how much he had.
U Because guests had to reciprocate by giving a gift of equal
And the plot thickens:
value, the host could humiliate a poorer rival with an invitation to a lavish potlatch.
The hapless guest would eventually be forced into bankruptcy because he needed
to give away as much as the host, even though he could not afford it. If this practice
sounds “primitive,” think for a moment about many modern weddings. Parents
commonly invest huge sums of money to throw a lavish party and compete with
others for the distinction of giving their daughter the “best” or most extravagant
wedding, even if they have to dip into their retirement savings to do it.
Like the potlatch ritual, in modern times our desire to convince others we have
a surplus of resources creates the need for us to exhibit the evidence that we do.
Accordingly, we may prioritize consumption activities that use up as many resources as possible in nonconstructive pursuits. This conspicuous waste, in turn,
shows others that we have the assets to spare. Veblen wrote, “We are told of certain
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
About 14 percent of
Americans live below the
poverty line, and most marketers largely ignore this
segment. Still, although poor people obviously have less to spend than do rich ones,
they have the same basic needs as everyone
else. Low-income families purchase staples,
such as milk, orange juice, and tea, at the
same rates as average-income families.
Minimum wage–level households spend more
than average on out-of-pocket health-care
costs, rent, and food they eat at home.89
Unfortunately, they find it harder to obtain
these resources because many businesses
are reluctant to locate in lower-income areas.
On average, residents of poor neighborhoods
must travel more than 2 miles to have the
same access to supermarkets, large drug
stores, and banks as do residents of more affluent areas.90
Still, a lot of companies are taking a second look at marketing to the poor because of
their large numbers. The economist C.K.
Pralahad added fuel to this fire with his book
The Fortune at the Bottom of the Pyramid,
which argued big companies could profit and
help the world’s 4 billion poor or low-income
people by finding innovative ways to sell them
soap and refrigerators.91
Some companies get into these vast markets as they revamp their distribution systems
or make their products simpler and less expensive. When Nestlé Brazil shrank the package size of its Bono cookies (no relation to
the U2 singer) from 200 grams to 140 grams
and dropped the price, sales jumped 40 percent. Unilever called a new soap brand Ala so
that illiterate people in Latin America could
easily recognize it. In Mexico, cement company CEMEX improved housing in poor areas
after it introduced a pay-as-you-go system to
buy building supplies.92
Muhammad Yunus, a Bangladeshi economist, won the 2006 Nobel Prize in Economics
for pioneering the concept of microloans. His
Grameen Bank loans small sums—typically
less than $100—to entrepreneurs in developing countries. Many of these go to “cell-phone
women,” who rent time on the phones to others in their remote villages. The bank has issued about 6 million loans to date, and almost 99 percent of recipients repay them
(compared to a 50 percent repayment rate for
a typical bank in a developing country).93
others through our display of wealth or power. Veblen coined the term conspicuous
consumption to refer to people’s desires to provide prominent visible evidence of
their ability to afford luxury goods. The material excesses of his time motivated
Veblen’s outlook. Veblen wrote in the era of the “robber barons,” where the likes of
J. P. Morgan, Henry Clay Frick, and William Vanderbilt built massive financial empires and flaunted their wealth as they competed to throw the most lavish party.
Some of these events were legendary, as this account describes:
CHAPTER 12
Income and Social Class
479
CB AS I LIVE IT
Shannon Fuller, College of St. Joseph’s
A
s I live in a world full of status
symbols, it is extremely hard not to
get caught up in the mess of who’s
who and where everyone ranks in a
certain social class. Even in a small
town like Rutland, Vermont status still
plays a major role in the life of
teenagers. Growing up I had three
siblings, two of which are also girls.
So like every moderate income family
that meant lots of hand-me-down
clothes, especially because one of my
sisters is only thirteen months older
than I. This meant a lot of my outfits
were already put on display once or
twice before, therefore the only way for
me to produce a style of my own was
to get a job. At the age of fourteen I
started my first job at McDonald’s.
Jobs are also a status symbol, which
meant I was not very high on the list.
As the years through high school went
on I struggled to maintain a status
higher than most kids but I was not
popular by any means. I moved on to a
better job at a gym and than a
furniture store. I C
was average, I was
everyone’s friend and I could float
H group but that
among every different
didn’t place me in
Rany type of status
either. The age finally set in where
I
cars, boys, and clothes
were on the
top of my list. I somehow
lucked out
S
and convinced my parents to let me
Tmy mom got a new
have their car and
one. So not only Idid I have a nicer car
than my older sister but I had a nicer
car than most of A
my friends. As the
years went on myNcar and I got older
together and three years later I
,
graduated high school.
Now I am in
college and it is amazing how status
symbols change with a complete 360.
J
A
Polynesian chiefs, who, under the stress of good form, preferred
M to starve rather than
carry their food to their mouths with their own hands.”87
I
As the competition to accumulate status symbols escalates, sometimes the best
Eis to deliberately avoid
tactic is to switch gears and go in reverse. One way to do this
status symbols—that is, to seek status by mocking it. Social scientists call this sophisticated form of conspicuous consumption parody display.88 Hence, the popu5 stonewash so they
larity of old, ripped blue jeans (or more likely the ones companies
look old and ripped), “utility” vehicles such as Jeeps among
5 the upper classes (like
the Caldwells), and brands with a strong blue-collar heritage like Von Dutch truck6
ers’ hats and Red Wing boots.
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How Do We Measure Social Class?
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Because social class is a complex concept that depends on a number
of factors, it is not
surprising that social scientists disagree on the best way to measure it. Early measures
included the Index of Status Characteristics from the 1940s and the Index of Social
Position from the 1950s.94 These indices combined individual characteristics (e.g., income, type of housing) to arrive at a label of class standing. The accuracy of these composites is still a subject of debate among researchers; a study claimed that for segmentation purposes, raw education and income measures work as well as composite
status measures.95 Figure 12.3 shows one commonly used measurement instrument.
American consumers generally have little difficulty placing themselves in either
the working class (lower-middle class) or middle class.96 The proportion of consumers
who identify themselves as working class tended to rise until about 1960, but it has
declined since then. Blue-collar workers with relatively high-prestige jobs still tend to
view themselves as working class, even though their income levels are equivalent to
Status is now more of who has a
higher GPA along with other
materialistic items but it is important
to be known and top of the class. I
still have my same old Honda, but I
maintain a positive role in the
business department as secretary of
Business Club and now just recently
voted in as Vice President for the
upcoming year. However status means
next to nothing now that I realized
there is a much bigger picture in life.
My GPA is one point away from a
perfect 4.0 but the time has arrived
where I have realized it is not about
the materialist things in life so much
anymore. It is about friends, family,
and finding happiness in yourself as
well as others. To many people status
is everything and will remain
everything but to me status is what
you make it. So I choose to make it
nothing and without status, I could not
be happier.
Marketing Pitfall
Men as trophies? In recent years the tables
have turned as older
women—who
increasingly boast the same incomes and social capital as their male peers—seek out younger
men as arm candy. These so-called cougars
are everywhere; surveys estimate that about
one-third of women over age 40 date younger
men. One self-professed cougar explained the
appeal: “The mentality of having a youthful
person on your arm who makes you feel good,
who makes you feel ageless, makes you feel
desired and desirable.” This trend gets carried
to the next level at an annual speed-dating
event that pairs rich older women with hot
younger guys. The “sugar mamas” have to be
over age 35 and earn at least $500,000 a
year or have a minimum of $4 million in liquid assets. A matchmaker selected 20 “boy
toys” out of 5,000 men who applied to meet
the cougars.86
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Ripped jeans (especially the pricey kind that
come that way when you buy them) are an
example of parody display.
Source: Courtesy of Stock Boston/Photo by Bob
Kramer.
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many white-collar workers.
class” or “middle class” are
, very subjective. Their meanings say at least as much about
self-identity as they do about economic well-being.
Problems with Measures
J of Social Class
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
ISBN 1-256-36592-0
Market researchers were among the first to propose that we can distinguish people
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from different social classes from one another. Some of these class distinctions still
exist, but—as we saw earlier—others
including brand preferences have changed.
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Unfortunately, many of these measures are badly dated and are not as valid today.98
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One reason is that social scientists designed most measures of social class with
E in mind; this unit included a male wage earner in the
the traditional nuclear family
middle of his career and a female full-time homemaker. These measures have trouble accounting for two-income families, young singles living alone, or households
5 as we saw in Chapter 11 are so prevalent today.
headed by women, which
Another problem with
5 measuring social class is the increasing anonymity of our
society. Earlier studies relied on the reputational method, where researchers con6 within an area to determine the reputations and backducted extensive interviews
grounds of individuals (see
7 the discussion of sociometry in Chapter 10). When they
used information and also traced people’s interaction patterns, they could generate
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a very comprehensive view of social standing within a community. However, this apU to implement in most communities today. One comproach is virtually impossible
promise is to interview individuals to obtain demographic data and to combine
these data with the interviewer’s subjective impressions of each person’s possessions and standard of living.
As an example, refer to the items in Figure 12.3. Note that the accuracy of this
questionnaire relies largely on the interviewer’s judgment, especially regarding the
quality of the respondent’s neighborhood. The interviewer’s own circumstances can
bias these impressions because they can affect her standard of comparison.
Furthermore, the instrument uses highly subjective terms: “Slummy” and “excellent” are not objective measures. These potential problems highlight the need to adequately train interviewers, as well as for some attempt to cross-validate such data,
possibly by employing multiple judges to rate the same area.
CHAPTER 12
Income and Social Class
Figure 12.3 EXAMPLE OF A COMPUTERIZED STATUS INDEX
Interviewer circles code numbers (for the computer) that in his/her judgment best fit the respondent and family. Interviewer asks for
detail on occupation, then makes rating. Interviewer often asks the respondent to describe neighborhood in own words. Interviewer
asks respondent to specify income—a card is presented to the respondent showing the eight brackets—and records R’s response. If
interviewer feels this is overstatement or understatement, a “better judgment” estimate should be given, along with an explanation.
EDUCATION:
Grammar school (8 yrs or less)
Some high school (9 to 11 yrs)
Graduated high school (12 yrs)
Some post high school (business, nursing, technical, 1 yr college)
Two, three years of college—possibly Associate of Arts degree C
Graduated four-year college (B.A./B.S.)
H
Master’s or five-year professional degree
Ph.D. or six/seven-year professional degree
R
Respondent
–1
R’s
–2 Age
–3
____
–4
–5
–7
–8
–9
Respondent’s Spouse
–1 Spouse’s
–2
Age
–3
____
–4
–5
–7
–8
–9
OCCUPATION PRESTIGE LEVEL OF HOUSEHOLD HEAD: Interviewer’s judgment of how head of household rates in
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occupational status.
(Respondent’s description—asks for previous occupationS
if retired, or if R is widow, asks husband’s: __________)
–0
Chronically unemployed—“day” laborers, unskilled; on welfare
Steadily employed but in marginal semiskilled jobs; custodians,T
minimum pay factory help,
–1
service workers (gas attendants, etc.)
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Average-skill assembly-line workers, bus and truck drivers, police and firefighters, route
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–2
deliverymen, carpenters, brickmasons
Skilled craftsmen (electricians), small contractors, factory foremen,
N low-pay salesclerks,
–3
office workers, postal employees
,
Owners of very small firms (2–4 employees), technicians, salespeople,
office workers, civil
–4
servants with average-level salaries
–5
Middle management, teachers, social workers, lesser professionals
Lesser corporate officials, owners of middle-sized businesses (10–20
J employees), moderate–7
success professionals (dentists, engineers, etc.)
A (leading doctors and lawyers),
Top corporate executives, “big successes” in the professional world
–9
“rich” business owners
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AREA OF RESIDENCE: Interviewer’s impressions of the immediate
I neighborhood in terms of its reputation in the
eyes of the community.
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Slum area: people on relief, common laborers
Strictly working class: not slummy but some very poor housing
Predominantly blue-collar with some office workers
Predominantly white-collar with some well-paid blue-collar
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Better white-collar area: not many executives, but hardly any blue-collar either
5
Excellent area: professionals and well-paid managers
“Wealthy” or “society”-type neighborhood
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TOTAL FAMILY INCOME PER YEAR:
Under $5,000
$5,000 to $9,999
$10,000 to $14,999
$15,000 to $19,999
–1
–2
–3
–4
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$20,000 to $24,999
$25,000 B
to $34,999
$35,000 to $49,999
$50,000 U
and over
–1
–2
–3
–4
–5
–7
–9
TOTAL SCORE _______
–5
–6
–7
–8
Estimated Status __________
ISBN 1-256-36592-0
(Interviewer’s estimate: ___________________ and explanation _______________________________________)
R’s MARITAL STATUS: Married ____ Divorced/Separated ____ Widowed ____ Single ____ (CODE: ____)
One problem when we assign any group of people to a social class is that they
may not exhibit equal standing on all of the relevant dimensions. A person might
come from a low-status ethnic group but have a high-status job, whereas another
may live in a fancy part of town but he may not have finished high school. Social
#ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc.
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SECTION 4
Consumers and Subcultures
scientists use the concept of status crystallization to assess the impact of social
class inconsistency.99 The logic is that when these indicators are not consistent stress
occurs because the rewards from each part of such an “unbalanced” person’s life are
variable and unpredictable. People who exhibit such inconsistencies tend to be more
receptive to social change than are those whose identities are more firmly rooted.
A related problem occurs when a person’s social-class standing creates expectations that he or she can’t meet. Some people find themselves in the not-unhappy
position of making more money than we expect of those in their social class. This
means they are overprivileged, a condition we define as an income that is at least 25
to 3...
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