 The Nature of Social Class: The term “Social Class” has been

defined as a group consisting of a number of people who have

approximately equal positions in a society.

 These positions may be achieved rather than ascribed, with some

opportunity existing for upward or downward movement to other
classes.

 There are six basic characteristics of social class:-

i. Social Class Exhibit Status: Social class and status are not
equivalent concepts although they do have an important
relationship.

 Status generally refers to one’s rank in the social system, as

perceived by other members of society.

 An individual’s status, therefore, is a function not only of the social

class to which he belongs but also of his personal characteristics.
 For example, the fact that an individual is a scientist means that he has a
high rank in the total social system. However, a scientist employed by a
prestigious research institute earning Rs. 15 lakhs a year will have higher
status or rank than a scientist employed by a small firm and earning Rs.
6 lakhs a year, even though both may be members of the same social
class.

 Moreover, an individual’s personal contributions to society will

help determine his or her status. For example, a scientist who
discovers a breakthrough in say nano technology, will have higher status
than another who has made no such contribution.

 Each society subjectively establishes its set of values. These values

are reflected in the ideal types of people in that society. Those who
more nearly conform to the ideal are accorded more respect and
prestige, while those who conform less nearly are ranked lower by the
society.

 In one country, members of the armed forces may be accorded the

greatest prestige, in another, politicians, educators, or business people
may be selected.
 The particular criteria used, as well as their relative weights, are
determined by the values which that society stresses.

 Factors that seem to be important in determining status are: Authority

over others, Power (political, economic, military), ownership of
property, income, Consumption patterns and lifestyle, Occupation,
Education, Public Service, Ancestry, and Association (ties and
connections).

 People buy products for what the products mean as well as what they
can do. i.e. Products and services are seen to have personal and
social meanings in addition to their purely functional purpose.

 The things consumers buy become ‘symbols’, telling others who

they are and what their social class is.

 In a complex society in which financial wealth dictates status,

one’s possessions become a substitute indicator of the individual’s
worth, value, wealth, and so forth. Possessions, therefore, take the
place of income as an indicator of status, since we aren’t likely to know
how much others are paid.
 Consequently, there may be members of a society at each social-
class level who seek to achieve a certain higher status by virtue of
their possessions. It should be noted, however, that others at the same
level may be content to save more and spend much less extravagantly.

 Marketers have always catered to consumers who were looking

for something to give them an edge, whether real or imagined,
over their peers.

 The key to status symbols is their scarcity and social desirability.

As such, they are marks of distinction, setting their owners apart from
others.

 This need for prestige – to be admired, envied, and acknowledged

by others – is vital in humans.

 The use of prestige appeal rests on the following assumptions:-

a. The need for prestige or self-esteem is universal.
b. Prestige is related to and satisfied by one’s product or service purchases.
c. The manifestation and satisfaction of this need vary across cultures.
d. A company’s multinational success depends on communicating and
embodying product prestige in a way that is culturally appropriate for
target segments.

 The effectiveness of a product or service prestige appeal is

conditioned on the basis of five factors:-

a. It is relatively expensive – you are one of the select few who can afford
it.
b. It is of high quality – you made a wise purchase decision and have
shown your good judgment and impeccable taste.
c. It is in limited supply – not everyone can obtain it.
d. Not everyone can qualify for it – only a select few meet the standards
for ownership.
e. It is purchased by a respected and admired group of people – you
will be associated with these people and worthy of respect and
admiration.
ii. Social Classes are Multidimensional: Social classes are
multidimensional, being based on numerous components.

 They are not equivalent to, or determined solely by, occupation or

income or any one criterion; however, they may be indicated by, or be
related to, one or more of these measures.

 It is important for the marketer to realize that some of these

variables are more reliable ‘proxies’ than others.
For example, Income is often misleading as an indicator of social-class
position. Yet money, far more than anything else, is what people
associated with the idea of social class.

 On the other hand, occupation generally provides a fairly good clue to

one’s social class; in fact, some believe it is the best single indicator
available, because certain occupations are held in higher esteem than
others by people.

 Housing is another key social-class ingredient, according to most

theories. Most marketers believe “Birds of a feather flock together” and
thus “You are where you Live”.
iii. Social Classes are Hierarchical: Social classes have a vertical
order to them, ranging from high status to low status. They
exist as a position on the social scale. Individuals may be placed
within a class on this hierarchy, based on status criteria.

iv. Social Classes Restrict Behaviour: Interaction between the classes

is limited because most of us are more comfortable and find
reinforcement with those “like us” in terms of values and
behaviour patterns.

 Consequently, members of the same social class tend to associate

with each other and not to any large extent with members from
another social class because they share similar educational
backgrounds, occupations, income levels, or lifestyles.

 The factor of limited interaction impedes interpersonal

communication between different classes about advertising,
products, and other marketing elements.
v. Social Classes are Dynamic: Social stratification systems with
which people have some opportunity for upward or downward
movement are known as open systems.

 People in closed system have inherited or ascribed status; i.e. they

are born into one social level and are unable to leave it.

 Thus, the difference between a system based on earned or

achieved status versus one based on inherited status is
significant with regard to social mobility.
The United States illustrates a social-class, of open system which
offers moderate opportunity for mobility. Although such a change
can occur, it is usually not large and generally takes place over an
extended time.
On the other hand, parts of rural India illustrate a caste, or
closed system which has existed for thousands of years, in which
social inequality is rigidly enforced, creating a permanent social
position assigned at birth and preventing any social mobility by the
individual.
 Social-Class Measurement and Categorisation: Research studies have
attempted to stratify social classes using various measurement
approaches. In general three methods are been utilized:-

i. The Subjective Method: In this approach, individuals are asked to rank

themselves in the social-class hierarchy. However, because most people
are reluctant to categorize themselves as either lower or upper class and
the middle class ends up with an unrealistically large share.

ii. The Reputational Method: This approach asks members of a

community to rank each other in the status system. Because citizens
must know each other in order to rank each other, this approach is
limited to small communities and, therefore, cannot be widely used by
the marketers.

iii. The Objective Method: Individuals are ranked on the basis of certain
objective factors and are positioned accordingly in the social-status
hierarchy. For this purpose the Computerized Status Index (CSI) has
been developed by Social Research Inc. and has been used successfully
since the late 1960s.
 Problems in Social-Class Measurement: The following are few of the
problem areas often associated with social-class measurement done by
marketers:-

i. The ranking of social class is based simply upon an average of the

person’s position on several status dimensions. This ignores the
inconsistencies which arise from an individual ranking high on one
dimension (such as income) but low on another (such as education).

ii. A person’s social-class is assumed to be stable, and thus the effects

of mobility are ignored.

iii. An individual identifies only with the social class in which he or

she is categorized, thus ignoring reference-group effects from
other classes.

iv. The social class of an entire family may be measured by

examination of characteristics of only the adult male wage
earner, thus ignoring characteristics of other family members,
particularly the employment and education of the adult female in
the family.
 Resolution of these and other problems would make the
concept of social class a more useful one for the marketers.

 Although the size of different classes may vary depending on

the classification method used and may shift over time, one
has to realize that the bulk of the market for most products
exists in the broad upper and middle class groups.

 This happens because of two reasons:-

a. The very highest class is made up of only about 1% of the population;

because of its wealth, it is important to the marketing of certain
luxury items. But, this group is too small in number to provide the
focal point for m0st marketers.

b. On the other hand, at the lowest end of the class spectrum one
generally finds a market that, even though sizable, does not have
sufficient income for many products.
 The Role of Social-Class in Segmenting Markets: It is evident that
social-class should help us to understand better the behaviour of the
various market segments, but it is important for the marketers to
know first that whether segmentation on the basis of social-class is
an advantageous approach or not.

 Social-class segmentation involves two basic issues. First, opinions

differ concerning which procedures are best for identifying social
classes.

 A second and more fundamental problem is whether it is even to use

social class (which is, in effect, a composite index consisting of
several variables) in segmenting markets, or whether to use a single
proxy variable such as income ( for which data is available more
readily).

• Social-Class and Income Related to Lifestyle Patterns: Those who

believe that social class is much better than income for market
segmentation claim that income categories are quite often irrelevant
in analyzing markets and explaining consumers’ shopping habits,
store preferences, and media usage.
 For example, An upper-middle-class family headed, perhaps, by a
young lawyer or an young executive or a college professor is likely to
spend a relatively large share of its income on housing in a
prestigious neighborhood, on expensive furniture, clothing from
quality stores, and on cultural amusements or club membership.

 A middle-class family headed, let’s say, by an insurance salesman or

a successful grocery store owner probably has a better house, but in
not as fancy a neighborhood; as full a wardrobe, although not as
expensive; more furniture, but none by name designer; and a much
bigger savings account.

 A working-class family headed, perhaps, by a welder or cross-

country truck driver, is likely to have less house and less
neighborhood than the others; however, it will have a larger, newer
automobile, more expensive kitchen appliances, and a larger TV set
in the living room. This family will spend less on home and
furniture, but more on clothing, food and sports.
 Nevertheless, most of the research that has been conducted has
found income to be more useful than social class for
segmenting markets.

 For example, in the hot southwest, income, not social class, largely
determines whether a family buys air conditioning. If the family can
afford to purchase air conditioning, it does so.

 On the basis of such findings, it would appear that social class,

although useful as a concept, has often not been as successful
as other approaches in segmenting markets.

 Based on the research studies, the following tentative

generalizations are possible regarding when social class, income, or
their combination is superior as a segmentation variable:

i. Social class is superior to income for areas of consumer

behaviour that do not involve high expenditures, but do reflect
underlying lifestyle, value or homemaker role differences.
• Relevant products in this situation might include instant, frozen,
and canned convenience foods & beverages; snack foods; and
imported and domestic wines, for example.

• Social class is also superior for both method and place of

purchase of highly visible, symbolic, and expensive living-room
furniture.

ii. Income is generally superior for products which require

substantial expenditures, and which may no longer serve as
symbols of status within a class or as status symbols to the
upper-lower class (such as major kitchen and laundry appliances).

iii. The combination of social class and income is generally

superior for product classes that are highly visible, serve as
symbols of social class or status within class, and require
either moderate or substantial expenditure (such as clothing
and makeup, automobiles, and television sets).
 Hence, before attempting to use social class as a segmentation
variable, the marketer should remember three guidelines:-

i. Social class may not always be a relevant consideration; i.e.,

segmentation by other criteria, such as age and sex, is frequently
more appropriate.

ii. Benefits from social-class segmentation for undifferentiated

products may be less than the costs incurred to achieve such
segmentation.

iii. Social-class segmentation is frequently most effective when used in

conjunction with such additional variables as life-cycle stage and
ethnic group.

 However, even for cases in which social class may have only limited
application, it does provide the marketer with helpful insights –
some of which may be specifically used in developing marketing
strategies, and others of which at least offer an improved general
understanding of consumer behaviour.