UNIT IV

Social Class: The division of members of a society into a hierarchy of distinct status classes, so that
members of each class have either higher or lower status than members of other classes.

Social Stratification, the divison of memebrs of a society into a hierarchy of distinct social classes, exists in all societies
and cultures.

Characteristics of Social Class:

 Is hierarchical
 Is a natural form of segmentation
 Provides a frame of reference for consumer behavior
 Reflects a person’s relative social status
 In Canada or US, individuals can move up or down the social class hierarchy
 Status is frequently thought of as the relative rankings of members of each social class
o wealth
o power
o prestige
Social Class and Marketing Strategy
 Clothing, Fashion, and Shopping
– Where one shops
– External point of identification
 The Pursuit of Leisure
– Type of leisure activities differ
 Saving, Spending, and Credit
– Level of immediate gratification(SATISFACTION) sought varies
 Responses to marketing communication
– Upper classes have a broader and more general view of the world
– Regional variations in language rise as we move down the social ladder
– Exposure to media varies by social class
Limitations of Social Class
 Social class is more difficult to measure than income
 Many purchase behaviors are related more to income than social class
 Consumers often use expected social class for their consumption patterns
 Dual incomes have changed consumption patterns
 Individual dimensions of social class are sometimes better predictors of consumer behavior
Social Class Mobility
People in community can move from one strata to another. They can move either up or down the social
class; this mobility gets exhibited in two forms.
 One, individuals can move either up or down in social-class standing across generations, i.e.
while their parents may have belonged to one strata, they begin to belong to another, either upper
or lower.
 Two, such a transition may also be seen through one’s life, i.e. as a person becomes independent
and starts earning, he may belong to one class and as he progresses in life, he may begin to
belong to another. Upward mobility is more common and is generally the trend these days.
As mentioned above, the higher social classes often become reference groups for people of lower social
status. Marketers realize this and use symbols of higher-class status into their products and advertisement,
both in terms of content and context. It has also been seen that that products and services that were
traditionally within the realm of one social class, are now getting into the realm of lower social classes.

Relevance of Social Class for a Marketer:

 The demographic and psychographic traits that have a bearing on lifestyle, and/or social class
hold great relevance for a marketer. The analysis of the social class helps profile consumers into
segments that a marketer could take advantage off through formulation of an appropriate
marketing strategy.
 While a marketer needs to cater to each of the segments in a different manner, he could design his
4Ps in a manner that leads to maximum benefit for himself as well as for the consumer. It is
noteworthy that each of these segments would have a different set of attitudes, values,
likes/dislikes and consumption patterns. They would even vary in terms of their priorities when it
comes to purchase of products and services, pursuance of hobbies and interests and broader
lifestyles.
 While people like to conform to others’ in their social class, they also like to emulate those in the
higher class. They aspire to move up the social ladder; in fact, social mobility is a common
phenomenon these days. The following section discusses real life applications of social class,
when it comes to products and services, hobbies and interests and general spending and saving
patterns.
a) Products and services: The choice of products and services and/or brands depends hugely upon the
lifestyle and social class. Members belonging to a social class would go in for such products and services
and/or brands which are used by others in that class. This is due to the fact that they seek social approval
and want to purchase what others purchase and use what other use. Upper class consumers favor fashion
and sophistication, and this reflects itself in their purchase of luxurious and prestige goods and branded
products. On the other hand the middle class takes into account value for money and looks for benefits
that can be derived from a purchase; they go for good, moderately priced goods and are less conscious of
branded goods. The lower class goes for goods of necessity. It is also true that people in a social class also
desire to behave like people in the upper class.
Social class impacts not only what the consumers buy, but also from where they buy. They visit shops,
markets and malls which are frequented by members of their social class. They avoid stores that have an
image very different from their own or their social class.
b) Hobbies and Interest: Social class also has a bearing on the kinds of hobbies and interest as well as
recreational activities that a person pursues. As mentioned above, the upper class consumers have greater
resources at hand; they favor fashion, style and sophistication. They go to clubs and play indoor games
like bridge and roulette, and outdoor games like golf, tennis and squash. They read books, watch theater,
go to concerts, and visit museums and art exhibitions. On the other hand, middle and lower class
consumers, watch television serials; they also like to watch sports on TV. The middle class women pursue
hobbies like needlecraft and they also have social (kitty) parties. Their primary activities include cooking
and looking after the home. Men involve themselves more into earning money.

c) Orientation towards saving and spending patterns: Social class membership also affects the
consumers’ attitudes towards saving and spending patterns. With the upper class consumers better off in
terms of finances than the middle and lower class consumers, their saving and spending patterns are
futuristic in approach. They invest in stocks and real estate, as well as luxurious and prestige goods.
While making purchases, they pay through the credit cards instead of the usual cash, purely for reasons of
a convenient substitute of cash. Middle class consumers are interested in making rational functional
approaches. They enter into purchase activity only when they have enough money to buy what they
desire. They are generally conservative by nature and prefer paying in cash. However, today things are
changing and we do find an increasing trend towards purchases made on credit and payments made on
monthly installments. Lastly, lower class consumers have less resources and buy when necessary. While
the upper classes use the credit card out of convenience, the middle class use it out of necessity; while the
former clear their credit card bills every month, the middle class look for installments.

Defining Consumer Lifestyle

Lifestyle can be described using the following statements:
 Lifestyle is a group phenomenon. An individual’s lifestyle is influenced by a variety of factors,
including participation in social groups and relationships with significant others. 
 Lifestyle influences many aspects of behavior.
 Lifestyle implies a central life interest- The upper-middle-class lifestyle, for instance, is usually
regarded as education and career oriented.

Influence of Culture on Consumer Behavior

We define culture as the sum total of learned beliefs, values, and customs that serve to direct the
consumer behavior of members of a particular society.

In a broad sense both values and beliefs are mental images that effect a wide range of specific attitudes
that, in turn, influence the way a person uses to evaluate alternative brands in a product category (such as
Volvo versus an Audi automobile).

Cultural factors comprise of set of values and ideologies of a particular community or

group of individuals. It is the culture of an individual which decides the way he/she behaves. In
simpler words, culture is nothing but values of an individual.

Cultural factors have a significant effect on an individual’s buying decision. Every individual has
different sets of habits, beliefs and principles which he/she develops from his family status and
background. What they see from their childhood becomes their culture.
Our culture says that we need to wear traditional attire on marriages and this is what we have
been following since years. People in North India prefer breads over rice which is a favourite
with people in South India and East India.

This model depicts the role that subjective culture plays in determining our beliefs, practices, and
values, which in turn impact our social norms, attitudes, behavioral intentions and ultimately our
behavior.
Subjective culture reflects regional character (e.g. – People living in several nations in a
particular region of South America) and religious similarities or differences, or shared or
different languages, national factors, such as shared core values, customs, personalities, and
group level factors are concerned with various subdivisions of a country or society (e.g. -
families, work groups, shopping groups, friendship groups) and many more factors.

Why it is important for marketers to understand the cultural impact on Consumer

Behavior?

The influence of culture on consumer behavior is profound, and if misunderstood or taken

lightly, then the product might fail in the new cultural market.
The best example of influence of culture on consumer behavior is McDonalds. The same
McDonalds has different type of Burgers in USA, UK and India. I am sure it will be different in
China as well. If McDonalds had kept the same taste in all these countries, it would have failed
to expand beyond US borders.
• Because culture satisfies needs : Culture exists to satisfy the needs of the people within
a society. It offers order, direction and guidance in all phases of human problem solving by
providing ‘tried and true’ methods of satisfying physiological, personal, and social needs.
e.g.:- Culture provides standards and ‘rules’ about when to eat, where to eat, what is
appropriate to eat for breakfast, lunch, dinner… etc

• Because culture is learned : Unlike innate biological characteristics, culture is learned.

The three distinct forms of cultural learning are formal learning, informal learning and technical
learning.
Although a firm’s advertising and marketing communications can influence all three
types of cultural learning, it is likely that many product marketing messages enhance informal
learning by providing the audience with a model of behavior to imitate.
• Because of Acculturation : Acculturation is an important concept for marketers who
plan to sell their products in foreign or multinational markets. In such cases, marketers must
study the specific cultures of their potential target markets to determine whether their products
will be acceptable to its members and if so, how they can best communicate the characteristics of
their products to persuade the target market to buy.
• When using Language and Symbols : To communicate effectively with their audiences,
marketers must use appropriate symbols to convey desired product images or characteristics.
These symbols can be verbal or nonverbal.
A symbol may have several, even contradictory meanings, so the advertiser must
ascertain exactly what the symbol is communicating to its intended audience.
• When facilitating Rituals : Most important from the standpoint of marketers is the fact
that rituals tend to be replete with ritual artifacts that are associated with or somehow enhance
the performance of the ritual.
• Because culture is shared : Various social institutions within a society transmit the
elements of culture and make the sharing of culture a reality. Such institutions are family,
educational institutions, houses of worship and most importantly mass media. Because
consumers receive important cultural information from advertising.
• Because culture is dynamic : To fulfill its need gratifying role, culture continually must
evolve if it is to function in the best interests of a society. For this reason, the marketer must
carefully monitor the socio-cultural environment in order to market an existing product more
effectively.

Subcultures

Subcultures may be based on age, geographic, religious, racial, and ethnic differences. 
For example, within youth culture it is possible to identify a number of sub-groups with common interests such
as skaters, surfers, ravers, punks, skin-heads, Goths, homies and others.
Subcultures are important to marketers for several reasons.
  Firstly given that subcultures can represent sizeable market segments which are profitable and
influential, there are obvious advantages in developing and selling products and services that meet the
needs of subculture members.
 Secondly, and perhaps less obviously, many new fads and fashions emerge spontaneously from within
these tribal groups. Trend-spotters are accordingly interested in studying the lifestyles and activities of
tribes in an effort to spot new trends before they go mainstream

Consumer Behavior - Cross-Culture

A consumer’s level of exposure towards foreign goods or lifestyles may influence his buying
decisions and preferences. Consumers tend to have an attitude when it comes to a particular
product being made in a particular country. This attitude might be positive, negative, and
neutral.

Cross-cultural consumer analysis is defined as the effort to determine to what extent the
consumers of two or more nations are similar or different.

A major objective of cross-cultural consumer analysis is to determine how consumers in two or

more societies are similar and how they are different. Such an understanding of the similarities
and differences that exist between nations is critical to the multinational marketer, who must
devise appropriate strategies to reach consumers in specific foreign markets.

The greater the similarity between nations, the more feasible it is to use relatively similar
strategies in each nation. If they differ in many aspects, then a highly individualized marketing
strategy is indicated.

The success of marketing and servicing in foreign countries is likely to be influenced by beliefs,
values, and customs.

Cross-Cultural Consumer Analysis

The effort to determine to what extent the consumers of two or more nations are similar or different.

Similarities and differences among people- The greater the similarity between nations, the more
feasible to use relatively similar marketing strategies Marketers often speak to the same “types” of
consumers globally.

Consumer ethnocentrism- ethnocentric individuals tend to view their group as superior to others.
What is Enculturation & acculturation?
 When a person is born into the world, he/she needs to learn how to live in the society
around him/her. This acquisition of social values and norms is known as the process of
socialization. Thus, enculturation is a similar word for socialization.
 Culture includes social values, norms, arts, beliefs, customs, traditions, food patterns,
clothing styles and many more things that are needed in order to survive in that particular
society.
 An individual should conform to these patterns and values to be accepted by others;
otherwise, they would be considered to be deviants by the rest of the society. Parents,
relatives, peers, colleagues and other social members help one to acquire the necessary
social skills; throughout our lifetime we learn several cultural traits and try to adhere to
those.
 Thus, enculturation teaches an individual of his/her position, roles, expectations and
behaviors of the particular culture in which he/she lives in. The learning of one’s own
culture is known as enculturation.
 The learning of a new or foreign culture is known as acculturation. This happens
when two or more cultures meet together and there is a possibility for cultural
interchange. 
 When two cultures mix together, there can be exchanges in beliefs customs, traditions,
clothing styles, food types etc. This change could be visible and affected to both cultures.
The refugees and immigrants also go through the acculturation process in adjusting to a
new place.
Impact of MNCs in India
MNCs as positive influence:
 They invest and hence help in the development of local infrastructure. This is especially true in
the case of large manufacturing companies. When they set up their facilities in India, they
develop the local infrastructure – communication facilities, transport etc.
 The government also invests in these areas and promotes infrastructure development.
 These companies generate employment for the local communities – especially for unskilled local
labor. They also generate employment for the skilled labor from various parts of the country.
 They help in the development of local resources which local companies are not capable of.
 They give the Indian people exposure to technology that they would not have got otherwise.
Hence this is another positive aspect of the presence of MNCs in India.
 The presence of large MNCs can help us with our foreign relations with other countries. For
example the presence of Coca Cola and Pepsi in India as well as other American MNCs, helps
India establish good relations with the US.
 The area surrounding the MNC facilities undergoes rapid development – not only in terms of
infrastructure, but also basic facilities like sanitation, security, water and power availability and
usage.
 They introduce global best practices in operations, supply chain, waste management and
reduction – practices that the local companies can adopt and imbibe and improve their
productivity.
 It helps in bringing in valuable foreign exchange, thereby helping imports due to strengthening of
INR
 MNCs are able to benefit from economies of scale and hence produce at lower average costs.
This helps consumers too by reducing their expenditure. These companies also guarantee the
same consistent quality of products and services that they offer the world over.
Negative Influence
 MNCs can inhibit the development of local technology and skills – in certain cases and for
variety of applications, MNCs bring in technologies from their native countries (technologies that
they trust) and hence local technological expertise is lost.
 MNCs have been often accused of building up their facilities on arable land – destroying farmers’
livelihood and also threatening the food security of the country.
 MNCs like Coca Cola have been accused of exploiting local ground water resources. There are
other cases too that accuse MNCs of not giving due attention to waste water treatment and
thereby effecting the local environment.
 MNCs have also been accused of exploiting the local resources with a view to achieving higher
profits.
 MNCs can use their economies of scale to push local firms out of business. Walmart is feared the
world over by small retailers for this very reason – by offering low prices. Walmart has been able
to push the smaller stores out of business.