Consumer Behavior: Buying, Having, and

Being
Thirteenth Edition, Global Edition

Chapter 12

Income and Social Class

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Learning Objectives
12.1 Our confidence in our future, as well as in the overall
economy, determines how freely we spend and the types of
products we buy.
12.2 We group consumers into social classes that say a lot
about where they stand in society.
12.3 Individuals’ desire to make a statement about their
social class, or the class to which they hope to belong,
influences the products they like and dislike.

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Learning Objective 12.1
Our confidence in our future, as well as in the overall
economy, determines how freely we spend and the types of
products we buy.

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To Spend or Not to Spend
Discretionary income is the money available to a household
over and above what it requires to have a comfortable
standard of living.
How we spend varies, based in part on our attitudes toward
money.
• Tightwads
• Spendthrifts

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Consumer Confidence
Factors affecting savings rate:
• Pessimism/optimism
• World events
• Cultural differences in attitudes toward savings

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Income Inequality
• Plutonomy

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Social Mobility
• Horizontal Mobility
• Upward Mobility
• Downward Mobility

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Income Based Marketing
Two factors contribute to an (overall) upward income
trajectory:
• A shift in women’s roles
• Increases in educational attainment

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Consumer View of Luxury Goods
• Luxury is functional
• Luxury is a reward
• Luxury is indulgence

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The Income Pyramid
• Top of the Pyramid
• Bottom of the Pyramid

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Figure 12.1 The 4 As

Source: Anderson and Niels Billou, “Serving the World’s Poor: Innovation at the Base of the Economic
Pyramid,” Journal of Business Strategy 28, 2: 14–21, reprinted in A. T. Kearney, Serving the Low-
Income Consumer: How to Tackle This Mostly Ignored Market, 2011, atkearney com

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For Reflection (1 of 3)
• How does your own attitude toward spending affect your
general shopping patterns?

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Learning Objective 12.2
We group consumers into social classes that say a lot about
where they stand in society.

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Social Class Structure
• “Haves” versus “have-nots”
• Social class is determined by income, family background,
and occupation
• Universal pecking order: relative standing in society
• Social class affects access to resources

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Picking a Pecking Order
• Artificial divisions in a society
• Achieved versus ascribed status
• Status hierarchy

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Components of Social Class
Occupational prestige
• Is stable over time and similar across cultures
• Single best indicator of social class
Income
• Wealth not distributed evenly across classes (top fifth
controls 75% of all assets)
• How money is spent is more influential on class than
income

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Social Stratification
• Status hierarchy
• Occupational prestige
• Worldview
• Affluenza
• Cosmo-politanism

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Predicting Consumer Behavior
• Social class is better predictor of lower to moderately
priced symbolic purchases
• Income is better predictor of major nonstatus/nonsymbolic
expenditures
• Need both social class and income to predict expensive,
symbolic products

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Problems with Social Class Segmentation
• Ignores status inconsistencies
• Ignores intergenerational mobility
• Ignores subjective social class
• Ignores consumers’ aspirations to change class standing
• Ignores the social status of working wives

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Social Class Around the World
• China
• Japan
• The Middle East
• The United Kingdom
• India

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For Reflection (2 of 3)
• How do you assign people to social classes, or do you at
all?
• What consumption cues do you use (e.g., clothing,
speech, cars, etc.) to determine social standing?

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Learning Objective 12.3
Individuals’ desire to make a statement about their social
class, or the class to which they hope to belong, influences
the products they like and dislike.

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Taste Cultures
• Taste culture differentiates people in terms of their
aesthetic and intellectual preferences
• Upper- and upper-middle-class are more likely to visit
museums and attend live theater
• Middle-class is more likely to go camping and fishing

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Figure 12.2 Living Room Clusters and
Social Class

Source: Adapted from Edward O. Laumann and James S. House, “Living Room Styles and Social Attributes: The
Patterning of Marerial Artifacts in a Model Urban Community,” Sociology and Social Research 54 (April 1970): 321–342.
Copyright, University of Southern California, April 1970. All rights reserved.

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Restricted Codes Versus Elaborated Codes
Table 12.1 Effects of Restricted versus Elaborated Codes
blank Restricted Codes
General Emphasize description and contents of objects
characteristics Have implicit meanings (context dependent)
Language Use few qualifiers, i.e., few adjectives or adverbs
Use concrete, descriptive, tangible symbolism
Social Stress attributes of individuals over formal roles
relationships
Time Focus on present; have only general notion of
future
Physical space Locate rooms, spaces in context of other rooms
and places: e.g., “front room,” “corner store”
Implications for Stress inherent product quality, contents (or
marketers trust-worthiness, goodness of “real-type”),
spokesperson Stress implicit of fit of product with
total lifestyle Use simple adjectives, descriptions
Elaborated Codes
Emphasize analysis and interrelationship
between objects; i.e., hierarchical organization
and instrumental connections Have explicit
meanings
Use large vocabulary, complex conceptual
hierarchy
Stress formal role structure, instrumental
relationships
Focus an instrumental relationship between
present activities and future rewards
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

Source: Adapted from Jeffrey F. Durgee, “How Consumer Sub-Cultures Code Reality: A Look at Some Code Types,” in
Richard J. Lutz, ed., Advances in Consumer Research 13 (Provo, U T: Association of Consumer Research, 1986): 332

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Social and Cultural Capital
• Social capital
• Cultural capital
– Glamping
• Online social capital
– Reputation economy
– Online gated community

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Status Symbols
• Invidious consumption
• Conspicious consumption
• Leisure class
• Trophy wives
• Cougars
• Brand prominence
• Status signaling

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How Brand Loyal Consumers Deal with
Counterfeiting
• Flight
• Reclamation
• Abranding

Source: Young Jee Han, Joseph C. Nunes, and Xavier Drèze (2010), “Signaling Status with Luxury Goods: The Role of
Brand Prominence,” Journal of Marketing 74 (July), 15–30, from Figures 2 and 3.

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Status Signaling
Figure 12.3 A Typology of Status Signalling

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For Reflection (3 of 3)
• Provide examples of quiet versus loud brand signals used
among your reference groups. What do these signals say
about social class and lifestyle?

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Chapter Summary
12.1 Our confidence in our future, as well as in the overall
economy, determines how freely we spend and the types of
products we buy.
12.2 We group consumers into social classes that say a lot
about where they stand in society.
12.3 Individuals’ desire to make a statement about their
social class, or the class to which they hope to belong,
influences the products they like and dislike.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright

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