Marketing Chapter 12 Income and Social Class

Discretionary income
money available to a household over and above what it requires to have a comfortable standard of living
Consumer confidence
how optimistic or pessimistic people are about the future health of the economy and how they predict they’ll fare down the road
One Percenter
those who earn the top 1% of income in our country
Income inequality
the extent to which resources are distributed unevenly within a population
CEO pay ratio
compares the salary of a company’s chief executive to the earnings of the typical employee
Social mobility
upward, downward, horizontal
Attitudes against materialism – Frugalistas
those that refuse to sacrifice style, but they want to achieve it on a budget
Hedonic adaptation
to maintain a fairly stable level of happiness, we tend to become used to changes, big or small, wonderful or terrible.
College wage premium
describes the gap between what workers w/ a college degree can earn vs. those w/o one
Attitudes towards luxury – functional, reward, indulgence
functional: spending money to buy things that will last and have enduring value; reward: use luxury good to say “I’ve made it”; indulgence: the purpose of owning luxury is to be extremely lavish and self-indulgent
Nouveau riches
describes consumers who recently achieved their wealth and who don’t have the benefit of years of training to learn how to spend it
Bottom of the pyramid; The 4 A’s strategy to cater to low income consumers
Awareness, affordability, acceptability, availability
Social class
describes the overall rank of people in a society
we tend to marry people in a social class similar to our own
Social stratification
refers to the creation of artificial divisions
Status hierarchy
some members of a group are better off than others
Occupational prestige
one way we evaluate people’s worth; a system in which we define people to a great extent by what they do for a living
another way to differentiate amongst social classes; i.e. the world of the working class is more intimate and constricted
many well-off consumers seem to be stressed or unhappy despite or even because of their wealth
someone who tries to be open to the world and who strives for diverse experiences
Income vs Social class
social class is a better predictor of purchases that have symbolic aspects but low to moderate prices (i.e. cosmetics and liquor); income is a better predictor or major expenditures that don’t have status or symbolic aspect (i.e. major appliances); both social class and income data are necessary to predict purchases of expensive, symbolic products
Mass class
describes the hundreds of millions of global consumers who now enjoy a level of purchasing power that’s self sufficient to let them afford high-quality products
Taste culture
describes consumers in terms of their aesthetic and intellectual preferences
the ways consumers express and interpret meanings; Elaborated codes: more complex and depend on a more sophisticated worldview; Restricted codes: focus on the content of objects–not the relationships among objects
taste is a status-marking force that causes consumption preferences to cluster together
Cultural capital
refers to a set of distinctive and socially rare tastes and practices that admits a person into the realm of the upper class
Social capital
an important form of “currency” is access to exclusive networks where business and political deals happen
Economic capital
monetary access to certain groups/places
Holt’s (1998) basic premises
Status symbols
products we are motivated to buy not to enjoy them but rather to let others know that we can afford them
Conspicuous consumption (Veblen)
refer to people’s desires to provide prominent visible evidence of their ability to afford luxury goods
Invidious distinction
we use things to inspire envy in others through our display of wealth and power
Leisure class
people for whom productive work is taboo
Stylistic innovation/Trickle-down theory (Simmel)
Brand prominence
different classes gravitate to different types of brands
Status signaling; : typology chart
think of bigger logos mean you want to show it off and more likely lower class whereas when you have more money you most likely want to get things with small logos or higher end brands
Parody display
to seek status by mocking status symbols (i.e. ripped jeans)
Brand aspirationalists, Price-sensitive affluents, Value-price shoppers
Ascribed vs Achieved status