The Family and Its Social Class Standing CHAPTER TEN The Family and Its Social Class Standing

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Learning Objectives To Understand the Changing Nature of U.S. Families, Including Their Composition and Spending Patterns. To Understand the Socialization Process and Other Roles of the Family. To Understand the Dynamics of Husband-Wife Decision Making, as Well as the Influence of Children in Family Consumption Decision Making. Here is an outline of the topics for Chapter Ten. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Learning Objectives (continued) To Understand How Traditional and Nontraditional Family Life Cycles Impact Consumer Behavior. To Understand What Social Class Is and How It Relates to Consumer Behavior. To Understand the Various Measures of Social Class and Their Role in Consumer Behavior. Here is an outline of the topics for Chapter Ten. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Learning Objectives (continued) To Appreciate the Distinctive Profiles of Specific Social Class Groupings. To Understand the “Ups and Downs” of Social Class Mobility. To Understand the Relationship Between Social Class and Geodemographic Clusters. To Understand the Affluent Consumer. Here is an outline of the topics for Chapter Ten. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Learning Objectives (continued) To Understand the Middle-Class Consumer. To Understand the Working Class and Other Nonaffulent Consumers. To Understand the Nature and Influence of the “Techno-Class.” To Understand How Social Class Is Used in Consumer Research Studies. Here is an outline of the topics for Chapter Ten. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

As You See It, What Is the Main “Family Message” of This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

It Reminds Parents of the Importance of Creating “Quality Time.” Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Changing U.S. Family Types of families Nuclear Extended Single-parent Changes in household spending patterns There are many different types of families. The nuclear family is two parents and at least one child. If the household has at least one grandparent, it is called an extended family. In addition, there is an increasing number of single-parent households. There are changes that have an effect on spending patterns. With more women working, many households have double income. In addition, families are shopping for time-saving products and services since they have less time at home. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Evidence of the Dynamic Nature of U.S. Households - Figure 10-2 This figure shows how U.S. households are changing over time. In this chart, we clearly see the decrease in married couples with children and an increase in women and men living alone. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Consumer Socialization The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers. Parents teach their children basic values and modes of behavior. These include moral and religious principles, as well as everyday skills such as manners and speech, grooming, and interpersonal skills. Do parents teach children consumption skills? Absolutely, they learn about spending versus savings, how to shop, and how to make purchase decisions. Children today are exposed to marketing messages at a very young age, especially through television advertising and the Internet. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Questions How do marketers influence consumer socialization? Does this seem unethical? At what point would it be unethical? Think about your own experiences as a child. How were you influenced by marketing messages? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

What Is the Name and Definition of the Process Depicted in This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer Socialization - the Process by Which Children Acquire the Skills, Knowledge, Attitudes, and Experiences Necessary to Function as Consumers Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

A Simple Model of the Socialization Process - Figure 10.4 Here we see a simple model of the socialization process that focuses on young children. It is interesting to note that the arrows run both ways from the child to their families and their friends. When you were a child, didn’t you help out a family member with working a television remote or told someone the right thing to say or do in a given situation? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Other Functions of the Family Economic well-being Emotional support Suitable family lifestyles In addition to socialization , the family provides other functions. The family provides economic security to its members, emotional support, and a way to share common goals and experiences. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Family Decision Making Dynamics of Husband-Wife Decision Making Husband-Dominated Wife-Dominated Expanding Role of Children In Family Decision Making Choosing restaurants and items in supermarkets Teen Internet mavens Pester power Husbands and wives often need to make decisions together. The way they balance their influence will differ as to whether it is joint, single, or dominated by one member. The balance between the husband and wife will differ from culture to culture. Furthermore, kids are very involved in family decision making. We are seeing an increase in this as kids are given more responsibility and are exposed to more media. Because kids are online so much, they are constantly finding information on products that they will share with the family. And kids don’t give up easily; when they want something they will ask many times. We say kids have pester power because they don’t give up and ask so many times. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Framework of 10-year-old Influencer Figure 10.5 Here is a framework that was built from a study of how children use strategies to influence their parents to purchase food. As you can see, these kids want to eat food that other kids eat, they want to eat in front of the TV, and they want to eat food that they see advertised on television. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 17 Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Family Life Cycle Traditional Family Life Cycle Stage I: Bachelorhood Stage II: Honeymooners Stage III: Parenthood Stage IV: Postparenthood Stage V: Dissolution Modifications - the Nontraditional FLC Marketers have long used the family life cycle, also known as FLC. It gives us an idea of the stages that many families pass throughout their life. The fact is that this traditional life cycle is only passed through by a certain percent of families, so many modifications have been made and a nontraditional family life cycle has been created. In terms of the traditional FLC, we see the 5 stages. Stage I, Bachelorhood, includes single men and women who have moved out of their parents’ home and are living on their own. The next stage, the Honeymooners, occurs immediately after marriage before the arrival of the first child. They often have start-up expenses as they establish a new home. Stage III, parenthood, occurs with the arrival of the first child. In this stage, people’s financial status often changes. Stage IV, postparenthood occurs when the children have left home. This is also called the empty-nest stage and is a time when couples have more time to themselves. The final stage, dissolution, occurs with the death of one spouse. Many in this stage will remarry or begin to live a more economical lifestyle. This web link takes you to Fidelity, a very well know financial services company. You can see that they have products that are targeted to all stages of the family life cycle. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

To Which Stage of the Family Life Cycle Does This Ad Apply, and Why? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Bachelorhood – The Target Consumer Is Not Yet Married Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Which Subgroup of “Empty Nesters” Does This Ad Most Likely Target? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The ones who are would like to pursue new interests and fulfill unsatisfied needs Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Nontraditional FLC Family Stages Alternative FLC Stage Definition/Commentary Childless couples Increasingly acceptable with more career-oriented married women and delayed marriages Couples who marry later in life Likely to have fewer or no children Couples with first child in late 30’s or later Likely to have fewer children. Want the best and live quality lifestyle Single parents I High divorce rate - about 50% lead to this Single parents II Child out of wedlock Single parents III Single person who adopts Extended family Adult children return home. Divorced adult returns home. Elderly move in with children. Newlyweds live with in-laws. As you can see from this table, there are many more types of family households than described in the traditional life cycle. In addition to the ones here, there are many nonfamily households not described in the traditional family life cycle. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Dual Spouse Work Involvement (DSWI) This model of dual spouse work involvement takes into account occupation status and career commitment of both spouses for segmentation. It puts together an 8-segment schema that explains attitudes, motivations, and consumer spending. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Social Class The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes. Here is a definition of social class. A description of the classes and their names will be provided in the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Social Class Measure and Distribution Table 10.8 SOCIAL CLASSES and PERCENTAGE Upper 4.3% Upper-middle 13.8% Middle 32.8% Working 32.3% Lower 16.8% These are the major social class categories and the percent of U.S. households they represent. As you can see, the upper is a relatively small percent of the overall population. In this chart, we see the hierarchal nature of social classes where they range from low to high. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Social Class Measurement Subjective Measures individuals are asked to estimate their own social-class positions Objective Measures individuals answer specific socioeconomic questions and then are categorized according to answers Researchers measure social class either by subjective or objective measures. In the subjective, people estimate their own class whereas in the objective measures, researchers use common objective measures, which are seen on the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Single-variable indexes Composite-variable indexes Objective Measures Single-variable indexes Occupation Education Income Composite-variable indexes Index of Status Characteristics Socioeconomic Status Score For the single-variable indexes, occupation is commonly used. Education is often used in combination with occupation or alone. A college degree is often a deciding factor in evaluating one’s social class. Income is frequently used, although not all researchers agree on it. Because two individuals will spend that income in different ways, they have different values that reflect lifestyles of different social classes. Because single variables are often too narrow for indexing social class, many researchers will use composite variables. The Index of Status Characteristics takes occupation, source of income, house type and quality of neighborhood into account. The Socioeconomic Status Score, which is from the U.S. Bureau of the Census, combines occupation, family income, and education level. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Questions What are the advantages to a marketer using the objective method to measure social class? When would the subjective or reputational method be preferred? Think about how people you know might report their social class – would it work to have them categorize themselves? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Social Class Mobility Upward mobility Downward mobility Rags to riches? Social class in the United States is not totally fixed. Although America is known as the land of opportunity, there are currently some signs of downward mobility where a family is not tending to do better then the last generation. The rags to riches stories that once occurred are fewer and further between. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 30 Chapter Ten Slide

Geodemographic Clusters A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods) and demographic variables (e.g., income, occupation) to identify target markets. Social class can be measured by linking data on where consumers live and their demographic information. This gives marketers a look at what consumers might purchase with their income. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Prizm Clusters Figure 10.10a, b Prizm from Claritas, (see Web link) is a service that clusters people to give data on their purchase and media habits. This slide presents an example of some of the Prizm clusters. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Affluent Consumer Growing number of households can be classified as “mass affluent” with incomes of at least $75,000 Some researchers are defining affluent to include lifestyle and psychographic factors in addition to income Affluent households are an especially attractive target to marketers because they have a large share of discretional income. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Affluent Consumer Three Segments of Affluent Customers’ Average Household Expenditures - Figure 10.12 This figure gives an approximation of how affluent households spend their money. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is the Name of the Segment Targeted by This Ad, and Why Is the Appeal Shown Here Used? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

This Ad was Used Because it is Effective for the Affluent Consumer. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

What Is the Middle Class? The “middle” 50 percent of household incomes - households earning between $25,000 and $85,000 The emerging Chinese middle class Moving up to more “near luxuries” It is not easy to define the middle class, but we can categorize them most easily by their incomes. We see that in certain countries, especially China, there is a growing middle class who are driven by a desire for social status and will purchase status symbols. As luxury products become more affordable, middle-class consumers will be drawn to purchasing them. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Working Class? Households earning $40,000 or less control more than 30 percent of the total income in the U.S. These consumers tend to be more brand loyal than wealthier consumers. The working class is a sizable part of the U.S. population. Many companies target this group with affordable options in food, clothing, and entertainment. To get an estimate of the size of different social groups based on income, this web link will bring you to U.S. Census data. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Questions What types of products are targeted to the working class? What issues must marketers consider when targeting their ads to the working class? Think about products that might appeal to working class customers. What do the ads and messages tend to present? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Techno Class Having competency with technology Those without are referred to as “technologically underclassed” Parents are seeking computer exposure for their children Geeks now viewed as friendly and fun Technology is becoming increasingly important to adults and children. Those very involved in technology, commonly referred to as geeks, are seeing that they are gaining popularity, both as adults and teens. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

In What Ways Have the Prestige and Status of Geeks Been Changing? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

The Change is Due to the Importance of Computers. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Consumer Behavior and Social Class Clothing, Fashion, and Shopping The Pursuit of Leisure Saving, Spending, and Credit Social Class and Communication Social class is important to keep in mind for marketers. Consumers of different social classes purchase clothes and spend their leisure time with different activities. In addition, different social classes tend to view savings vs. spending differently and will view different television shows and visit different websites. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Ten Slide