Chp. 12 with Duane Weaver

Income and Spending Social Class and Impacts The Family Defined Effects of Family Structure and

Composition The Family Life Cycle Family Decision Making Family Decision Roles

Average Canadian Standard of Living relatively high in international standards:

Avg. Family Income = 67.6K in 205 to 75.32K in 2009Note: In 2008, 2.5 Billion people in world live on <$2/day = $730/year

Poverty Line (Revenue Canada) just over $30,000

Income up due to shift in women’s roles and education (24% of couples the wives paychecks propelling the income

ladder) % of Cdns. with college diploma 50% (2009) up from 39% (1999)

Discretionary Income a.k.a “disposable income”

“the money available for a household over and above that required for a comfortable standard of

living.” ^^^what does this really mean??^^^

+or

?

Social Class = a consumer’s standing Determined by a complex set of variables including

income, family background, and occupation within a particular culture.(note we will look at cultural implications separately)

Is it Have vs. Have not?

What is the “have”???

How does the perception of social class impact the cognition of spending?(e.g. minimalism vs. materialism)

Picking a Pecking orderE.G.: Max Weber: Prestige or Social honour (status groups) Power (party) Wealth and Property (Class)

Social Stratification:Process by which scarce and valuable resources are distributed unequally to status positions.

Examples?

Social class “standing” can be used to segment markets as we see examples of buyer behaviour that are related.E.g.: Working class focusing on Function and Yuppie focusing on Image.

World-view of classes(how globally we see different classes (activities, desires, hopes of change/destiny))

Taste cultures aesthetic and intellectual preferences Strong differences in how classes spend discretionary

income and leisure time

Targeting Social Class From what we have learned, how can we

better target a specific social class? High income Middle income Low income

Invidious distinction – products that inspire envy in others through display of wealth or power.

Conspicuous consumption – people’s desire to provide prominent, visible evidence of their ability to afford luxury goods.

Parody Display – seek status by reverse consumption, (mocking status symbols – do not buy because it is status related – desire to be above it all).

Extended familyExtended family traditional family structuretraditional family structure several generations live several generations live

togethertogether Nuclear familyNuclear family

a married couple and their a married couple and their childrenchildren

Family householdFamily household Containing at least two Containing at least two

people people a husband and wife, married or a husband and wife, married or

living common lawliving common law a lone-parent, with children a lone-parent, with children

who have never married and who have never married and are still living at homeare still living at home

Family’s needs and expenditures are affected by

1.The number of people in a family

2.The ages of family members

3.The number of adults employed

outside the home

The Family Life CycleClassifies consumers based on

trends in income,family composition,& demands placed upon income

Life cycles determine which product categories are bought, but not how much is

spent on each category.

Age of Head of HouseholdUnder 35 yrs 35-64 yrs Over 64 yrs

One adult in household

Bachelor I Bachelor II Bachelor III

Two adults in household

Young couple Childless couple Older couple

Two adults plus children in household

Full nest I*

Full nest II*

Delayed full nest*

Full nest III*

Full Nest I: youngest child is younger than 6 yrsFull Nest II: youngest child is older than 6 yrsFull Nest III: youngest child is older than 6 yrs and the parents are middle aged Delayed Full Nest: parents are middle-aged but the youngest child is younger than 6 yrsAdapted from: Mary C. Gilly and Ben M. Enis

Modern – exercise – go out to bars,concerts, movies..etc

Dollar value of durables increases as nest empties or parents age

Consensual purchase decision the group agrees on the desired purchase

differ on how it will be achieved

Accommodative purchase decision reaching agreement among group members

by bargaining, coercing, compromising and wielding power

1) Initiator1) Initiator

2) Information Gatherer2) Information Gatherer

3) Gatekeeper3) Gatekeeper

4) Influencer4) Influencer

5) Decision Maker5) Decision Maker

6) Buyer6) Buyer

7) Preparer7) Preparer

8) User8) User

9) Maintainer9) Maintainer

10) Disposer10) Disposer