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Chapter 13

Chapter 13. Income and Social Class. The average American’s standard of living continues to improve and can be linked to: Women’s roles in the workplace - women are obtaining more high-paying occupations, and

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Chapter 13

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  1. Chapter 13 Income and Social Class

  2. The average American’s standard of living continues to improve and can be linked to: Women’s roles in the workplace - women are obtaining more high-paying occupations, and Increases in the attainment of education - college graduates earn 50% more than high school grads. Consumer demand for goods and services depends on ability and willingness to buy . Discretionary Income is the money available to a household over and above that required for a comfortable standard of living. Consumers tend to equate money with security and comfort and they are anxious about holding on to what they have. Income Patterns

  3. About 33 million (11.7%) Americans Live in Poverty Poverty = A Family of 4 Making Less Than $18,000 In the Bay Area, a family of 4 needs to make an average of $37/hr to rent a two-bedroom house. On the Other Hand……

  4. Income Gap in the U.S. States with the widest gaps in average income, 1998–2000 Source: Economic Policy Institute and Center on Budget and Policy Priorities' analysis of data from the U.S. Census Bureau's Current Population Survey

  5. Income Gap in the U.S. States with the narrowest gaps in average income, 1998–2000 Source: Economic Policy Institute and Center on Budget and Policy Priorities' analysis of data from the U.S. Census Bureau's Current Population Survey

  6. Consumers’ beliefs about what the future holds is an indicator of Consumer Confidence. Reflects the extent to which people are optimistic or pessimistic about the future health of the economy. When people are pessimistic about their prospects, they tend to cut back their spending and take on less debt. When they are optimistic about the future, they tend to reduce the amount they save, take on more debt, and buy discretionary items. Consumer Confidence

  7. Consumer Sentiment and Expectations

  8. Then Now Car BMW Honda Home Potrero Hill Apt Cole Valley Apt With View With Roommate Breakfast Tully’s Mocha Home-brewed Beverage Coffee Shopping Neighborhood Market Costco Business Financing Venture Capital Bootstrapping Strategy Subdued Simplicity: Post Dot Com Source: San Francisco Chronicle (2001)

  9. How Much Money Will Be Spent How Money Will Be Spent Access to Resources Such as Education, Housing, and Consumer Goods Taste and Lifestyles Social Class Social Class is Determined by a Complex Set of Variables, Including: Income, Family Background, and Occupation. Social Class Influences:

  10. Status Hierarchy Some Members Are Somehow Better Off Than Others Social Stratification Refers to the Creation of Artificial Divisions In a Society by: Social Stratification Achieved Status Earned Through Hard Work Ascribed Status Obtained Through Luck or Inheritance

  11. Upper-Upper 0.3% Lower-Upper 1.2% Upper-Middle 12.5% Class Structure in the U.S. Middle Class 32% Working Class 38% Lower But Not Lowest 9% Access to Resources Such As Money, Education, and Luxury Goods Real Lower-Lower 7%

  12. Horizontal Mobility Social Mobility Social Mobility Refers to the Passage of Individuals From One Social Class to Another. Upward Mobility Downward Mobility

  13. Components of Social Class Occupational Prestige Income Educational Attainment

  14. The relationship between income and social class: More income doesn’t necessarily result in increased status or changed consumption patterns. Income predicts purchase of expensive products without status (i.e. major appliances). Social class can predict the purchase of low to moderate priced symbolic products (i.e. cosmetics). Both social class and income are needed to predict purchases of expensive, symbolic products (i.e. cars, homes). Relationship Between Incomeand Social Class

  15. Measurement of Social Class Changes in Family Structure Problems With Measures of Social Class Women and Social Class Increasing Anonymity Status Inconsistency

  16. Worldview Appropriate? Considerations for Constructing Marketing Messages Codes Taste Cultures How Social Class Affects Purchase Decisions

  17. 14% of Americans Live Below the Poverty Line Many Firms Target Affluent Markets Targeting the Poor Targeting the Rich Many Feel Alienated by Society Some Firms Develop Products for Them The Nouveau Riches Educate Consumers on How to Stretch $ The “Get Set” Some Firms Locate Closer to this Market Targeting Different Income Levels Luxury Products Are Important “Old Money” Consumers

  18. The Billboard Wife Common Characteristics of Conspicuous Consumption Leisure Class Status Symbols Status Symbols Modern Potlatch Parody Display

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