Chapter 12: Income, Social Class, and Family Structure Flashcards
12.2 We group consumers into social classes that say a lot about where they stand in society.
12.2 We group consumers into social classes that say a lot about where they stand in society.
Social Class
The overall rank of people in a society; people who are grouped within the same social class are approximately equal in terms of their social standing, occupation, and lifestyle
People who belong to the same social class have approximately equal social standing in the community. They work in roughly similar occupations, and they tend to have similar lifestyles by virtue of their income levels and common tastes. These people tend to socialize with one another and share many ideas and values regarding the way life should be lived
The place a person occupies in the social structure is an important determinant not just of _______ money is spent but also _______ is spent.
how much
how it
Old money
People who have had money for a long time and do not need to prove it
Aka: they dont need to spend their money to show they have money to spend
New money
In contrast, consumers who are relative newcomers to affluence might allocate the same amount of money very differently
Example of careful spending based on income status
The moissanite market is projected to hit $50 million by 2025. So, after all is said and done, are diamonds “still a girl’s best friend?
Fake wedding rings so you can go on a nice honey moon or pay for a mortgage
Pecking order
Not the chicken example
But the fact that society has a pecking order ranked in terms of their relative standing in society
Our standing determines our education, housing, consumer goods
The German sociologist Max Weber showed that the rankings people develop are not one-dimensional;
some rankings involve prestige or “social honour” (he called these status groups), some focus on power (or party), and some revolve around wealth and property (class)
homogamy or “assortative mating
We tend to marry people similar in social class to ourselves
Social stratification
The process 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
reputation economy
this term refers to the “currency” people earn when they post comments online and others recommend their comments
Achieved status
Your hard work has led you to be better off
“Every hair in my mink coat represents a toilet I’ve cleaned.”
Ascribed status
Born with the silver spoon
Some socialites, such as Paris Hilton and Kim Kardashian, have been criticized because their fame seems to have more to do with ascribed status than with their talent or hard work.
Status hierarchy
A ranking of social desirability in terms of consumers’ access to such resources as money, education, and luxury goods
Income inequality
the extent to which resources are distributed unevenly within a population
Social mobility
The movement of individuals from one social class to another
Horizontal mobility
occurs when a person moves from one position to another that is roughly equivalent in social status; for instance, a nurse becomes an elementary school teacher
Downward mobility
movement none of us wants but, unfortunately, we observe this pattern when displaced workers are forced to go on social assistance or people join the ranks of the homeless
The top three countries for encouraging mobility were
Denmark, Austria, and Norway
China Class Structure
Nike shoes are a a symbol of success
Items in China are not as expensive meaning a family that makes under the North American poverty line can still have nice clothes and fancy items
Japan Class Structure
Tsunami hurt their economy but japan also cares for high quality items.
They like to splurge to give the illusion of wealth to help reduce their anxieties
Single working women buy the most luxury items
Middle East Class structure
Few arab women work
But many arab women like to shop with their friends
The United Kingdom Class Structure
- Very class conscious
- Marketing chavs’ as a group
India Class Structure
- Half of population lives on less than $1.25 a day
- Dogs are a symbol of wealth
Brazil Class Structure
- Showing off wealth is important as it commands respects
- Work of arts is important
Mass class
This segment comprises the hundreds of millions of global consumers who now enjoy a level of purchasing power that enables them to afford high-quality products—except for big-ticket items such as university educations, housing, or luxury cars
Examples: Latin Americans have their Volkswagen Beetle (affectionately called el huevito, the little egg); Indian consumers had their Maruti 800 in production for almost thirty years75 (selling for as little as $5720); and the Fiat Palio, the company’s “world car,” targeted people in 40 countries worldwide
Occupational prestige
the notion that some occupations are more respected than others
Stable over time and similar across cultures
Single best indicator of social class
Social Class facts
How Income Relates to Social Class
Whether social class or income is a better predictor of a consumer’s behaviour depends on the type of product:
Social class is a better predictor of purchases that have symbolic aspects but low-to-moderate prices (e.g., cosmetics and liquor).
Income is a better predictor of major expenditures that do not have status or symbolic aspects (e.g., major appliances).
Both social class and income data are needed to predict purchases of expensive, symbolic products (e.g., cars and homes).
Potent actors
those who believe they have the ability to take actions that affect their world
For example, the professionals in the study who were likely to be potent actors set themselves up for financial opportunity and growth
Impotent reactors
those who feel they are at the mercy of their economic situations
Affluenza
Many well-off consumers seem to be stressed or unhappy despite or even because of their wealth
three groups on the basis of their attitudes toward luxury:
1) LUXURY IS FUNCTIONAL
2) LUXURY IS A REWARD
3) LUXURY IS INDULGENCE
1) LUXURY IS FUNCTIONAL
Summary: Logical purchases, not impulsive
These consumers buy things that will last and have enduring value. They conduct extensive pre-purchase research and make logical decisions rather than emotional or impulsive choices.
2) LUXURY IS A REWARD
Summary: Younger people…I’ve made it!
These consumers tend to be younger than the first group but older than the third group. They often 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 cars and homes in exclusive communities.
3) LUXURY IS INDULGENCE
Summary: Lavish and self-indulgent
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 items is to be extremely lavish and self-indulgent. This group is willing to pay a premium for goods that express its individuality and make others take notice. These consumers have a more emotional approach to luxury spending and are more likely than the other two groups to make impulse purchases
Old Money Famalies
(e.g., the Bronfmans, Westons, Killams, McCains) live primarily on inherited funds
And they are secure in their status. In a sense, they have been trained their whole lives to be rich
