Income and Social Classes

Income and Social Classes

* It is getting more difficult to clearly link certain brands or stores with a specific class. Marketplace changes make it difficult for a casual observer to accurately place a consumer in a social class just by looking at the products they purchased.

* "affordable luxuries" are now within reach of many consumers who could not have acquired them in the past.

* Profound changes in global income are now driving this shift. Rising income coupled with decreasing prices for quality consumer goods and services are leveling the playing field. More and more consumers participate in the global economy.

* Two major ones are occupation and income.

 Occupational Prestige

* We define people to a great extent by what they do for a living. Their job provides their income and subsequently affects their expenditure habits.

* Occupational prestige is one way we evaluate their worth. Hierarchies of occupational prestige tend to be stable over time and across cultures.

* Because a person's occupation links strongly to his or her use of leisure time, allocation of family resources, aesthetic preferences and or political orientation, many scientist consider it the singe best indicator of social class.

❷ Income

* The distribution of wealth is interesting because it determines which group has the greatest buying power and market potential.

* Wealth is by no means distributed evenly among the classes. Income per se is not often a good indicator of social class because the way we spend our money is more telling than how much we spend.

* We direct our behavior towards a goal which we value positively. However, sometimes we could also be motivated to avoid a negative outcome rather than achieve a positive outcome.

* Because a purchase decision can involve more than one source of motivation, the challenge is for marketers to provide solutions to these dilemmas.

❸ 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. The two are not synonymous which is why people with a lot of money try to buy their way into it.

o Social class is a better predictor of purchases that have symbolic aspects but low to moderate prices.

o Income is a better indicator of major expenditures that do not have status or symbolic aspects.

o We need both to predict purchase of expensive symbolic products.

❹ Class differences in worldview

* A worldview is one way to differentiate among social classes.

* E.g. to generalize, the world of the working class is more intimate and constricted, where the high classes focus on long term goals such as investment plans or college funds.

* Working class consumers depend