THE CHANGING AMERICAN SOCIETY: DEMOGRAPHICS AND SOCIAL STRATIFICATION 4 CHAPTER THE CHANGING AMERICAN SOCIETY: DEMOGRAPHICS AND SOCIAL STRATIFICATION 4-1

Consumer Behavior In The News… Can you guess which generation is the highest prescription-drug user? Can you guess what percent in each generation is on at least one prescription-drug? Mature Market Generation X Generation Y Millennials Source: “Report: 44% of Americans Medicated,” CNN.com, January 3, 2004. 4-2

Consumer Behavior In The News… If you answered the “mature market” you were correct. And, those taking at least one prescription drug by age category is as follows: > 18: 24 percent 18-44: 35 percent 45-64: 62.1 percent 65+: 84 percent Source: “Report: 44% of Americans Medicated,” CNN.com, January 3, 2004. 4-3

Demographics and Social Stratification Population and Size Occupation Education Income Age 4-4

Demographics and Social Stratification Occupational Influences on Consumption 4-5

Demographics and Social Stratification Education Level Influences on Consumption 4-6

Demographics and Social Stratification Age U.S. Age Distribution1 Key Growth Categories 1 “Population by Age Group,” Statistical Abstract of the United States 2001 (Washing, DC: U.S. Bureau of the Census, 2001), p. 16. 4-7

Demographics and Social Stratification Age Influences on Consumption 18-24 25-34 35-44 45-54 55-64 65+ 4-8

Understanding American Generations A Generation or age cohort is a group of persons who have experienced a common social, political, historical, and economic environment. Cohort analysis is the process of describing and explaining the attitudes, values and behaviors of an age group as well as predicting its future attitudes, values, and behaviors. 4-9

Understanding American Generations Pre-Depression Depression Baby Boom Generation X Generation Y Millennials Mature Market 4-10

Understanding American Generations How to Target the Mature Market Gerontographics has identified the following four segments of the mature market: - Healthy Indulgers (7 million, rapidly growing) - Ailing Outgoers (18 million) - Health Hermits (20 million) - Frail Recluses (18 million) 4-11

Understanding American Generations Baby Boom Generation: A Closer Look Compared to prior generations, Boomers are: Higher income, higher education More tech savvy Defining retirement differently Boomers also are: Strong market for “anti-aging” products, travel, and financial services Often alienated by overly “youth oriented” appeals in ads 4-12

Understanding American Generations Generation Xers: A Closer Look Beyond the stereotype: Stereotype – Xers as disenfranchised youth Reality 1– Xers are more highly educated than previous generations Reality 2– Xer women are more highly educated than Xer men Reality 3– Xers are getting married, having families and facing the time pressures associated with these events Reality 4– Reaching Xers requires special attention to media, particularly online 4-13

Understanding American Generations Generation Yers: A Closer Look Interesting Facts About Gen Y: Really Two Sub-Markets: Twenty-somethings and Teens Expected to have the highest education of previous generations with incomes to follow Very tech savvy with media options including Internet, cell phones, and video games A strong market for automobiles with brands like Toyota creating edgy and affordable models such as the Scion to target them 4-14

Social Stratification Social Rank and Social Class System Status Crystalization The Derived Nature of Social Class The Coleman-Rainwater Hierarchy The Measurement of Social Class Social Stratification and Marketing Strategy 4-15

Social Stratification We are all familiar with the concept of social class, but most of us would have difficulty explaining our class system to a foreigner. Social rank is one’s position relative to others on one or more dimensions valued by society, also referred to as social class and social standing. A social class system is a hierarchical division of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles. "Pure” social classes do not exist in the U.S. or most other industrialized societies. 4-16

Social Stratification Status dimensions, such as parental status, education, occupation and income, set limits on one’s lifestyle, including one’s residence. Status crystallization, which is moderate in the U.S., reflects the consistency of these status dimensions. Web Exercise What Social Class are You? Play the “Chintz or Shag” Game from PBS Click button to link to PBS site 4-17

Social Structure in the United States Social Standing is Derived and Influences Behavior 4-18

Social Structure in the United States The Coleman-Rainwater Social Class Hierarchy 4-19

Social Structure in the United States The Coleman-Rainwater Social Class Hierarchy 4-20

Social Structure in the United States Middle Americans Upward Pull Strategy 4-21

The Measurement of Social Class There are two basic approaches to measuring social status: - Single-item index - Multi-item index Since an individual’s overall status is influenced by several dimensions, single-item indexes are generally less accurate than are well-developed multi-item indexes. 4-22

The Measurement of Social Class Single-Item Index Education Occupation Income Marketers generally think of these as direct influencers of consumption behavior rather than determinants of status that then influence behavior. 4-23

The Measurement of Social Class Multi-Item Index Hollingshead Index of Social Position Index of Social Position (ISP) Warner’s Index of Status Characteristics Index of Status Characteristics (ISC) Census Bureau’s Index of Socioeconomic Status Socioeconomic Status Scale (SES) 4-24

The Measurement of Social Class Demographics or Social Status? Social status is largely derived from demographics; that is, one’s income, education, and occupation go a long way toward determining one's social class or status. Should marketers use an overall measure of social status (a multi-item index) or a demographic variable such as income? Unless the marketer is interested social standing per se, he/she will most likely focus on demographic characteristics as direct influencers on consumer behavior! 4-25

Social Stratification and Marketing Strategy While social stratification does not explain all consumption behaviors, it is certainly relevant for some product categories. You can clearly see this by visiting a furniture store in a working-class neighborhood and then an upper-class furniture store. A product or brand may have different meanings to members of different social strata, for example, a watch. Likewise, different purchase motivations for the same product may exist between social strata. 4-26