CH-10 The Family and Its Social Class Standing – Consumer Behaviour : Chapter Notes

Chapter 10 The Family and Its Social Class Standing LEARNING OBJECTIVES After reading, studying and analyzing this chapter, students should be able to understand: 10.1 The family as a consumer socialization agent. 10.2 Family decision making and its members’ consumption-related roles. 10.3 The role of the family life cycle in market segmentation and targeting. 10.4 The consumption patterns of nontraditional families and non-family households. 10.5 The impact of social stratification on consumer behavior. 10.6 How to measure social class and segment consumers accordingly. 10.7 The demographics, lifestyles, and consumption patterns of America’s social classes. 10.8 How to employ geo-demographics to locate target markets. CHAPTER SUMMARY Learning Objective 10.1: To understand the family as a consumer socialization agent. The family is the primary reference group for many attitudes and behaviors. The family is also the prime target market for most products and product categories. As the most basic membership group, a family is defined as two or more persons related by blood, marriage, or adoption who reside together. Socialization is the process of making people behave in a way that is acceptable to their society. In the context of marketing, the most important role of the family is the socialization of family members, ranging from young children to adults. This process includes imparting to young children the basic values and modes of behavior consistent with their culture, including moral principles, interpersonal skills, acceptable dress and grooming standards, appropriate manners and speech, and the selection of suitable educational and occupational or career goals. Learning Objective 10.2: To understand family decision-making and its members’ consumption-related roles. Marketers recognize that families operate as units in terms of consumption behavior, and many researchers have studied the dynamics of family decision-making. Specifically, marketers focus on husband–wife decision-making; the relative influence each family member has regarding consumption; children’s role in family decision-making; and the multiple roles family members can assume in buying, using, and maintaining their possessions. Most consumer studies classify family consumption decisions as husband-dominated, wife-dominated, joint, or autonomic decisions. The relative influence of a husband and wife on a particular consumer decision depends mainly on the product or service category. Over the past several decades, there has been a trend toward children playing a more active role in what the family buys, as well as in the family decision-making process. Measuring family decision-making is complex, because marketing research questionnaires are designed to be administered to only one respondent at a time. Also, family members may not all agree with each other’s perspective regarding the degree of relative influence regarding a given purchase decision; this fact also precludes interviewing all members together. Learning Objective 10.3: To understand the role of the family life cycle in market segmentation and targeting. The family life cycle represents the life stages of a typical family. It is a composite variable that combines marital status, size of family, age of family members (focusing on the age of the oldest or youngest child), and employment status of the head of household, and then classifies the family into a “typical” stage. The ages of the parents and the relative amount of disposable income are inferred from the family’s stage in the cycle. The family life cycle starts with bachelorhood and then moves on to marriage (and creation of the family unit). Marriage usually leads to a growing family (with the birth of children) and later to family contraction (as grown children leave the household). The cycle ends with the dissolution of the family unit (due to the death of one spouse). Learning Objective 10.4: To understand the consumption patterns of nontraditional families and non-family households. There are living arrangements that are not “typical.” Families that do not readily fit into the family life cycle include childless couples, people who marry late in life, young people who continue to live with their parents or return after having moved out, and divorced couples. Living situations that are not legally defined as families (e.g., couples who live together but are not married) include unmarried couples, single parents, and gay spouses. The number of non-family households has been on a rather steep rise, which represents a marketing dilemma: Marketers of many products must now acknowledge the existence of nontraditional household segments, but must do so without offending members of traditional families who might react negatively to portrayals of nontraditional households, because of religion and beliefs as to what is or is not “right.” Learning Objective 10.5: To understand the impact of social stratification on consumer behavior. Social stratification (or social class) is the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less status. Some form of class structure (or social stratification) has existed in all societies throughout the history of human existence. In contemporary societies, people who are better educated or have prestigious occupations have more status relative to other members of the same society. Belonging to a given social class is also reflected in differences in the values, attitudes, and behaviors (including consumer behavior) among members of different social classes. Social class is a continuum along which society’s members—usually as households—are placed into one stratum; that is, “assigned” to a social class according to their relative prestige within that society. Learning Objective 10.6: To understand how to measure social class and segment consumers accordingly. The measurement of social class is concerned with classifying individuals into social-class groupings. These groupings are of particular value to marketers, who use social classification as an effective means of identifying and segmenting target markets. There are two basic methods for measuring social class: subjective measurement and objective measurement. Subjective measures rely on an individual’s self-perception, whereas objective measures use specific socioeconomic measures, either alone (as a single-variable index) or in combination with others (as a composite-variable index). Composite-variable indexes, such as the index of status characteristics and the socioeconomic status score, combine a number of socioeconomic factors to form one overall measure of social-class standing. Learning Objective 10.7: To understand the demographics, lifestyles, and consumption patterns of America’s social classes. Lifestyles, consumption patterns, leisure activities, hobbies, media exposure, and scores of other factors are homogeneous within and heterogeneous among social classes. There is no uniform definition or even general agreement as to how many distinct classes adequately depict the class structure of the U.S. population. Most early studies divided Americans into five or six social-class groups; other researchers have found nine-, four-, three-, and even two-class schemas suitable. The choice of how many separate classes to use depends on the amount of detail that the researcher believes is necessary to adequately explain the attitudes or behavior under study. We identified seven social classes: 1. the upper-upper class (inherited wealth and privilege); 2. the Nouveau Rich (new money); 3. the upper-middle class (high educational attainment and prestige); 4. the lower-middle class (semi-professional, non-managerial employees and skilled crafts people, whose lifestyle is considered average); 5. the upper-lower class (solidly blue collar, with highly routinized jobs and steady incomes); 6. the working poor (low on the social ladder and economically insecure); and 7. the underclass (mostly unemployed and dependent on the government). Learning Objective 10.8: To understand how to employ geo-demographics to locate target markets. Marketers use geo-demography to identify the geographic locations of consumers belonging to different social classes. The rationale for using geo-demographics is that families with similar socioeconomic status reside in the same neighborhoods or communities, as illustrated by the saying that “birds of a feather flock together.” Geo-demographic segments are groups of households that have been identified, classified, and described according to Zip Codes and data from the U.S. Census and state and local governments. The most sophisticated geo-demographic segmentation is Nielsen’s PRIZM®. CHAPTER OUTLINE INTRODUCTION 1.Family and social class are two reference groups that have a powerful impact on consumer behavior. 2.Family is a basic concept, but it is not easy to define because family composition and structure, as well as the roles played by family members, are almost always in transition. a)Traditionally, family is defined as two or more persons related by blood, marriage, or adoption who reside together. b)There are three types of families in Western societies: married couples, nuclear families and extended families. i)A married couple and one or more children constitute a nuclear family. ii)A nuclear family, together with at least one grandparent or other relation living in the household, is called an extended family. c)A family life cycle is a composite variable that combines marital status, size of family, age of family members, and employment status of the head of household and classifies families into stages. 3.Social class is the division of members of a society into a hierarchy of distinct status classes, in which members of a class have relatively the same status and members of all other classes have more or less status. *****Use Key Terms family, nuclear family, extended family, family life cycle, social class Here; Use Figure #10.1 Here***** The Family as a Socialization Agent 1.Socialization refers to the process of making people behave in a way that is acceptable to their society a)In the case of young children, this process includes imparting to children the basic values and modes of behavior consistent with the culture (moral principles, interpersonal skills, dress and grooming standards, appropriate manners and speech, and the selection of suitable educational and occupational or career goals). b)Parental socialization responsibility seems to be constantly expanding. 2.The aspect of childhood socialization that is particularly relevant to the study of consumer behavior is consumer socialization, which is defined as the process by which children acquire the skills, knowledge, and attitudes and experiences necessary to function as consumers. a)Many preadolescent children acquire their consumer behavior norms through observation of their parents and older siblings who function as role models and sources of cues for basic consumption learning. b)In contrast, adolescents and teenagers are likely to look to their friends for models of acceptable consumption behavior. c)Shared shopping experiences (i.e., co-shopping is when mother and child shop together) also gives children the opportunity to acquire in-store shopping skills. 3.A socialization agent is a person or organization involved in the socialization process “because of frequency of contact with the individual and control over the rewards and punishments given to the individual. “ a)Mothers are generally considered to be stronger consumer socialization agents than their husbands, because they tend to be more involved with their children, and are more likely to mediate their children’s exposure to commercial messages. b)Consumer socialization of children does not function identically in all families. *****Use Key Terms consumer socialization and socialization agent Here; Use Learning Objective #10.1 Here; Use Review and Discussion Question #10.1 Here; Use Figures #10.2, #10.3 and #10.4 Here; Use Table #10.1 Here; ***** 4.Parental styles influence children’s development and consumer socialization. a)Parental styles are classified along two dimensions: i)permissive vs restrictive. ii)very nurturing vs. non-nurturing. b)Four parental styles include: i)Indulgent parents ii)Neglecting parents iii)Authoritative parents iv)Authoritarian parents *****Use Key Terms indulgent parents, neglecting parents, authoritative parents, authoritarian parents Here; Use Figure #10.5 Here***** 5.Consumer socialization is learning. a)Materialism increases from middle childhood to early adolescence then declines from early to late adolescence. b)There is an inverse relationship between self-esteem and materialism in children and adolescents. 6.Socialization begins in early childhood and extends throughout a person’s life. a)Adolescents may become skeptical about marketing. b)Life changes (marriages, births, pet adoptions) also affect socialization. 7.Product preferences and brand loyalties are often transferred from one generation to another, which is known as intergenerational brand transfer. 8.Families have supportive functions: economic well-being, emotional support, and suitable family lifestyles. a)Economic well-being: Providing financial means to its dependents is unquestionably a basic family function. b)Emotional support: The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important core function of the contemporary family. c)Suitable Family Lifestyles: Another important family function in terms of consumer behavior is the establishment of a suitable lifestyle for the family. *****Use Tables #10.2 and #10.3 Here; Use Figures #10.6, #10.7 Here***** Family Decision-Making and Consumption-Related Roles 1.Marketers recognize that families operate as units in terms of consumption behavior. 2.Marketers study the dynamics of family decision making and how family members affect purchase, use and maintenance of possessions. *****Use Learning Objective #10.2 Here***** 3.Marketers are interested in the relative amount of influence that a husband and a wife have when it comes to family consumption choices. a)Family consumption decisions can be classified as: i)Husband dominated ii)Wife dominated iii)Joint—equal or syncratic iv)Autonomic—solitary or unilateral b)The relative influence of a husband and wife on a particular consumer decision depends in part on the product and service category. c)The relative influence has changed over time. d)Husband-wife decision-making also appears to be related to cultural influence. i)In the People’s Republic of China, there were substantially fewer “joint” decisions and more “husband-dominated” decisions for many household purchases than among Chinese in the United States. ii)Rural couples were less likely to share equally in purchase decisions; urban couples were more likely to share. *****Use Key Terms husband-dominated decisions, wife-dominated decision, joint decisions, and autonomic decisions Here ***** 4.Over the past several decades, there has been a trend toward children playing a more active role in what the family buys, as well as in the family decision-making process. a)This shift in influence has occurred as a result of families having fewer children, more dual-income couples who can afford to permit their children to make a greater number of the choices, and the encourage of the media to allow children to “express themselves.” b)Research evidence supports the notion that the extent to which children influence a family’s purchases is related to family communications patterns. c)Research has explored the notion of the teen Internet maven—teenagers who spend considerable time on the Internet and know how to search for and find information, and respond to requests from others to provide information. d)The strategies used by children to influence their parents’ food purchasing decisions included such persuasive strategies as: pressure, exchange, rational, consultation and ingratiation. 5.Children are three markets; marketers can apply the framework in Table 10.4. 6.An instrument designed to measure family decision-making is shown in Table 10.5. 7.Table 10.6 shows another perspective on family decision-making which consists of roles that members play in buying decisions. a)Parents are gatekeepers b)Children might be influencers, deciders, buyers and preparers depending on the product category. *****Use Tables #10.4, #10.5, #10.6 Here; Use Review and Discussion Question #10.2 Here; Use Hands-on Assignment #10.9 Here ***** The Family Life Cycle 1.The family life cycle (FLC) is a progression of stages through which many families pass. a)FLC analysis enables marketers to segment families in terms of a series of stages spanning the life course of a family unit. b)The FLC is a composite variable created by systematically combining such commonly used demographic variables as marital status, size of family, age of family members (focusing on the age of the oldest or youngest child), and employment status of the head of household. *****Use Key Term family life cycle (FLC) Here; Use Learning Objective #10.3 Here; Use Review and Discussion Question #10.3 Here ***** 2.The model has five basic stages. a)Bachelorhood. Young single adult living apart from parents. b)Honeymooners. Young married couple. c)Parenthood. Married couple with at least one child living at home. d)Post-parenthood. An older married couple with no children living at home. e)Dissolution. One surviving spouse. *****Use Key Terms bachelorhood, honeymooners, parenthood, post-parenthood, dissolution Here; Use Figures and #10.8, #10.9 and #10.10 Here**** Nontraditional Families and Non-Family Households 1.Marketers distinguish between two type of families or households that are not typical. a)Nontraditional families do not readily fit into the family life cycle b)Non-family households are not legally defined as families *****Use Key Terms nontraditional families, non-family household; Use Learning Objective #10.4 Here; Use Figure #10.12; Use Table 10.7 Here; Use Hands-on Assignment #10.10 Here ***** 2.When households undergo status changes, they become attractive targets for many marketers. 3.Marketers have to be careful not to alienate conservative members of traditional families as they try to target nontraditional households. 4.Dual spousal work involvement is a composite index that uses occupational status and the career commitment of both spouses as a basis for segmentation. The result is an eight-category schema: a.Retired couples b.Nonworking wife, low husband-occupation status couples c.Nonworking wife, high husband-occupation status couples d.Dual low occupation status, blue-collar husband couples e.Dual low occupation status, low white-collar husband couples f.High husband, low wife-occupation status couples g.Medium-high wife-occupation status couples h.Dual-very high occupation status career couples 2.Empirical research has shown that this model can explain both attitudes/motivations and consumer spending. *****Use Figure #10.14 Here***** Social Standing and Consumer Behavior 1.Social class is the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less status. a.Some form of class structure or social stratification has existed in all societies throughout the history of human existence. b.Social class can be thought of as a continuum – a range of social positions on which each member of society can be placed – researchers have preferred to divide the continuum into a small number of specific social classes, or stratum. *****Use Learning Objective #10.5 Here; Use Key Term social class Here***** 2.Researchers define each social class by the amount of social status or prestige the members of that class have in comparison to members of other social classes. Status is composed of: a.Wealth (economic assets) b.Power (degree of influence over others) c.Esteem 3.To secure an understanding of how status operates within the minds of consumers, researchers have explored the idea of social comparison theory: individuals quite normally compare their own material possessions with those owned by others in order to determine their relative social standing. *****Use Key Term social status Here ***** 4.There is no general agreement as to how to measure social class. a.The choice of how many separate classes to use depends on the amount of detail that the researcher believes is necessary to explain adequately the attitudes or behavior under study. b.The result is a wide variety of measurement techniques, which may be classified into subjective measures and objective measures of social class. *****Use Key Terms subjective measures and objective measures Here; Use Learning Objective #10.6 Here; Use Review and Discussion Question #10.4 Here ***** i.In the subjective approach to measuring social class, individuals are asked to estimate their own social class positions. 1.The resulting classification of social class membership is based on the participants’ self-perceptions or self-images. 2.Social class is treated as a “personal” phenomenon, one that reflects an individual’s sense of belonging or identification with others. 3.This feeling of social-group membership is often referred to as class consciousness. 4.Subjective measures of social class membership tend to produce an overabundance of people who classify themselves as middle class. *****Use Key Term class consciousness Here***** ii.Objective measures consist of selected demographic or socioeconomic variables concerning the individual(s) under study. 1.These are measured through questionnaires of factual questions. 2.The most frequently used questions are about occupation, amount of income, and education. 3.Sometimes geo-demographic data in the form of zip codes and residence-neighborhood information is added. 4.Occupation is a widely accepted and probably the best documented measure of social class, because it reflects occupational prestige. 5.The level of a person’s formal education is another commonly accepted approximation of social class standing (the more education a person has, the more likely it is that the person is well paid). 6.Researchers who favor income as a measure of social class use either amount or source of income. a.A recent effort to differentiate between “income” and “wealth,” points that wealth, not income, is the primary driver to financial freedom. b.Wealth and money are not the same; for wealth you need to network and build personal alliances. 7.You need to find ways to minimize your taxes because taxes reduce your ability to create wealth. *****Use Figures #10.13 – #10.17 Here; Use Review and Discussion Questions #10.5 and #10.6 Here; Use Hands-on Assignment #10.11 Here ***** 5.A multivariable index systematically combine a number of socioeconomic variables to form one overall measure of social-class standing. a.They seem to better reflect social class complexity than single element indicators. b.Two of the more important composite indexes are: i.Index of Status Characteristics—the Warner Index of Status Characteristics (ISC)—is a classic composite measure of social class that weighs occupation, source of income, house type, and dwelling area equality of neighborhood. ii.Socioeconomic Status Scores—the United States Bureau of Census developed the Socioeconomic Status Score (SES) that combines the socioeconomic variables of occupation, family income, and educational attainment. *****Use Key Terms multivariable indexes, Index of Status Characteristics, and Socioeconomic Status Scores Here***** Social Classes’ Characteristics and Consumer Behavior 1.Lifestyle factors (shared beliefs, attitudes, activities, and behaviors) distinguish members of a social class from members of other social classes. *****Use Learning Objective #10.7 Here; Use Table #10.8 Here; Use Figure 10.18 Here; Use Review and Discussion Question #10.7 Here ***** 2.Individuals can move either up or down in social class standing from the class position held by their parents. 3.Most Americans think of upward mobility. a)This results in the upper classes being the reference group for many ambitious men and women in America. b)Recognizing these aspirations, marketers frequently incorporate higher-class symbols into their advertising. 4.Social class mobility also contributes to products and services filtering down from a higher level to a lower one (trickle-down effect). *****Use Key Terms upward mobility, trickle-down effect Here ***** 5.Affluent households are attractive target segments because its members have incomes that provide them with a disproportionately larger share of all discretionary income, making them a lucrative market for luxury goods. a)For over 30 years, Ipsos Mendelsohn (formerly Mendelsohn Media Research) has conducted an annual study of the affluent market—currently defined in terms of three affluent segments: i)Those with household incomes of $100,000 to $149,000 per year—the “least affluent.” ii)Those with incomes of $150,000 to $249,000 per year—the “medium affluent.” iii)Those with incomes of $250,000 or more per year—the “most affluent.” b)Although the affluent market consists of only 20 percent of all households, this upscale market accounted for over half of all U.S. household income. 6.Affluent customers have different media habits and characteristics, and have been segmented as follows: a)Well-feathered nests—households that have at least one high-income earner and children present. (37.3 percent of the Upper Deck). b)No strings attached—households that have at least one high-income earner and no children. (35.1 percent of the Upper Deck). c)Nanny’s in charge—households that have two or more earners, neither earning high incomes, and children present. (8.3 percent of the Upper Deck). d)Two careers—households that have two or more earners, neither earning high incomes and no children present. (9.4 percent of the Upper Deck). e)The good life—households that have a high degree of affluence with no person employed, or with the head-of-household not employed. (10.0 percent of the Upper Deck) *****Use Key Term affluent market Here; Use Table #10.10 Here***** 7.It is not easy to define the borders of what is meant by “middle class.” a)Middle market has been defined as the “middle” 50 percent of household incomes – that is about 57 million households earning between $25,000 and $85,000. b)The dynamic nature of social class in the United States has been working against the middle class. c)There is mounting evidence that the “middle class” is shrinking in America. 8.Lower-income, or downscale consumers are households earning $35,000 or less. a)Downscale consumers are more brand loyal than wealthier consumers because they can not afford to make mistakes in switching to unfamiliar brands. b)Marketers need to be sensitive to the reality that downscale consumers often spend a higher percentage of their available incomes on food than do their middle-class counterparts. c)Food is an important purchase area for low-income consumers because it represent an area of “indulgence.” *****Use Key Term downscale consumers Here ***** 9.Most people dress to fit their self-images, which include their perceptions of their own social class membership. a)Lower middle-class consumers have a strong preference for T-shirts, caps, and other clothing that offer an external point of identification. b)Upper-class consumers are likely to buy clothing that is free from such supporting associations; they seek clothing with a more subtle look. c)Social class is also an important variable in determining where a consumer shops. 10.Saving, spending, and credit card usage all seem to be related to social class standing. a)Upper-class consumers are more future-oriented and confident of their financial acumen; they are more willing to invest in insurance, stocks, and real estate. b)In comparison, lower-class consumers are generally more concerned with immediate gratification; when they do save, they are primarily interested in safety and security. 11.Social class groupings differ in terms of how they transmit and receive communications. a)When it comes to describing their world, lower-class consumers tend to portray it in rather personal and concrete terms, although middle-class consumers are able to describe their experiences from a number of different perspectives. b)Such variations in response indicate that middle-class consumers have a broader or more general view of the world, although lower-class consumers tend to have a narrow or personal view, seeing the world through their own immediate experiences. 12.Downward mobility, defined as moving down, rather than up the social ladder, is taking place with today’s second youngest generation; they will experience lower living standards than their parents. *****Use Key Term downward mobility Here; Use Review and Discussion Question #10.8 Here ***** Geo-demography and Social Class 1.Marketers use geo-demography to identify the geographic locations of consumers belonging to various social classes. a)Birds of a feather flock together b)Geo-demographic segments have been classified and described according to zip codes and data from census sources. c)PRIZM is the most sophisticated geodemographic segmentation, as it combines socioeconomic and demographic factors with buying and media habits. *****Use Key Terms geo-demographic segments, PRIZM, Here; Use Figures #10.19A and #10.19B Here***** Instructor Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828