PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)

Intramuros, Manila

PLM BUSINESS SCHOOL

GROUP 9 - Income and Social Class, Household Influences

MAR 4110-3 - Consumer Behavior

Submitted by:

Camantigue, Kyle Aerika M.

Ignacio, John Lester S.

Laxa, Jirah Mariano L.

Navarro, Christine Julia E.

Omela, April Sheena

Pias, Jhastine P.

Yambao, Julianne Carol V.

Submitted to:

Prof. Chesney C. Malapit

Income and Social Class, Household Influences

1. Income and Social Class, Household Influences( Ignacio, John Lester S. )

a. Social Class Systems( Yambao, Julianne Carol V . )

b. How Social Class Changes over Time( Pias, Jhastine P. )

c. Status Symbols and Social Capital( Navarro, Christine Julia E. )

d. The Consumption Patterns of Specific Social Classes( Omela, April

Sheena )

❖ The Upper Class ( Laxa, Jirah Mariano L.

❖ The Middle Class( Laxa, Jirah Mariano L.
❖ The Working Class( Laxa, Jirah Mariano L.
❖ The Homeless( Laxa, Jirah Mariano L.

e. How the Household Influences Consumer Behavior( Camantigue, Kyle

Aerika M )

❖ Types of Households
❖ Family Life Cycle
❖ -Roles of Household Members (Spouses and Children)
1.Income and Social Class, Household Influences

Household Decision Rules

Roles That Household Members Play

Gatekeeper: Collect and controls relevant information

Influencers: Express opinions and influences the decisions

Decider: Determines which product service will be chosen

Buyer: Physically acquires the product service

User: Actually, consumes the products

How the household influences Consumer Behaviors

Type of Households

- Nuclear Family: Parents + Children

- Extended Family: Nuclear family + Relatives

- Households: Individuals who Live togethers

Social Class Hierarchy

- The Groupings members of society according to status

Family Life Cycle

- Bachelors/ Single adult

- Young people

- Full nest or single parents

- Empty nest or older Couple

The stages in which families are tend to have a significant impact on the
kinds of goods and services they desire, their patterns of consumption, and
how much of a particular product they consume. The aforementioned
section demonstrates how each stage has its own distinct needs, as well
as how they accumulate their possessions and place their demands,
depending on the size of the family. Therefore, it is possible to suggest that
the family life cycle is a better indicator of consumption trends. Marketing
professionals can create appropriate goods and services that can address
particular needs at each family stage by accurately identifying the stages of
the family life cycle. Additionally, it assists them in creating customized
marketing plans that cater to the needs of the Specific target audience

Types of social class and the 3 major Classes

- Upper Class

- Middle Class

- Lower Class

- Differences across the world

How Does Social Class affect consumptions

*Compensatory Function

- Buying things to make up frustration in life

* Meaning Of money

- money as both good and evil

- money and happiness

* Conspicuous Consumptions

- Buying things to show off one status

*Status Place

- Indicators as owner place in the social Hierarchy

An extremely significant factor that affects a person's purchasing behavior

is social perception. An individual from a lower income group could prioritize the
price while making a purchase, whereas an individual from a higher income
group might think about the product's quality and distinctiveness.

How Social Class is Determined

- Income versus Social Class

- Occupation and educations

- Area of residence, possessions inherited status vs earned status

a. Social Class Systems

What is the Social Class System?

- It is a division of members of a society depending on its status. Each

member of the class has the same level of status while the others can be
more or less status.

Six categories of classes by warner:

This categorized class helps marketers to select their target group.

Upper Upper Class

- This class is the social elite one, they inherit families wealth and they
belong to well known families. They are usually in the market for jewelry,
homes and other luxurious things.

Lower Upper Class

- This class are the ones who earned their wealth by their business or
profession. They are active in social and they're usually into expensive
cars, home and schooling that can symbolize their social status for them
and their children.

Upper Middle Class

- This class is concerned with their "career" ; they don't have unusual
wealth. They have this mindset to pursue the career path that they want
and these are the professionals and corporate managers. They believe in
education and also believe that if their children develop administrative
skills they can prevent them from dropping to the lower stratum or class.
Lower Middles Class

- Some of this class are highly paid workers and some of them are small
business owners. They want to have well maintained house and a good
neighboorhood. Which means, a comfortable life.

Upper Lower Class

- The people in this class are working, and poorly paid but they managed to
live with a standard living just above the poverty line. These are the
people who work for their everyday survival.

Lower Lower Class

- This class is where the people are poverty- stricken and usually don't have
a job. Most are dependent on charity for their income and usually they live
a dirty and uncomfortable life.
b. How Social Class Changes over Time

Culture

Understanding a consumer's behavior requires an understanding of their culture.

It stands for the individual community's set of values.

All these factors must be taken into account by marketers when evaluating or
watching customer behavior because they have a significant impact on the
consumer's behavior, perceptions, and expectations.

Social Mobility

Types of Social Mobility

1. Horizontal mobility
Movement between social groupings with the same social status or changing
occupations without changing occupational status are examples of movement
between positions within the same social level.

2. Vertical mobility
Moving from one social level level to a higher (upward mobility) or lower one
(downward mobility)

3. Upward mobility
The advancement of a person, social group, or class to a position of greater
prestige or power.

4. Downward mobility
The movement of a person, social group, or class to a lower level in society. See
also horizontal mobility and vertical mobility.

5. Inter-generational mobility
The social movement within or between social classes and vocations that occurs
from generation to generation

6. Intra-generational mobility
Sociological movement among or between social groups and vocations that
occurs within a person's lifespan
c. Status Symbols and Social Capital

Social Symbol and Social Capital

Status Symbol - A possession that is taken to indicate a person's wealth or

high social or professional status.

By Region and Time

Before the printing press, a large collection of books was a measurement of

one's wealth. Having a lot of books in possession shows wealth and
means you belong to the higher class. In later centuries, books became
so common to people that a private library was later used as a
measurement of wealth.

In most cultures in East Asia, jewelries such as jade and pearls were major
status symbols. Similarly to variants of toga in ancient Rome. In china,
specific colors were reserved for the royalties only and severe penalties
were given to those who will use these colors unauthorized, these colors
were mainly yellow and royal purple. In European medieval was a display
of one’s family name and history, hence, heraldry.

Societal Recognition

Status symbols also indicate the cultural values of a society or a subculture.

For instance, having money to purchase houses, cars and fine clothings,
anything that can be possessed with wealth are considered status
symbols.

In the early times, Scars represent honor and courage amongst warriors,
they also served as a symbol of respect for these people. Having the
ability to think in an intelligent way regardless of material possession is
also considered a status symbol among intellectuals. In the academe,
having a place and being tenured at prestigious schools or research
institute and long lists of publications are marks of high status,

A uniform symbolizes membership in an organization, and may display

additional insignia of rank, specialty, tenure and other details of the
wearer's status within the organization. A state may confer decorations,
 medals or badges that can show that the wearer has heroic or official
status. Elaborate color-coded academic regalia is often worn during
commencement ceremonies, indicating academic rank and specialty.

In many cultures around the world, diverse visual markers of marital status
are widely used. Coming of age rituals and other rites of passage may
involve granting and display of symbols of a new status. Dress codes may
specify who ought to wear particular kinds or styles of clothing, and when
and where specific items of clothing are displayed.

Body Modification

Dieting to reduce excess body fat is widely practiced in Western society,

while some traditional societies still value obesity as a sign of prosperity.

Some groups, such as extreme bodybuilders and sumo wrestlers use special
exercise and diet to "bulk up" into an impressive appearance.

Material Possession

Luxury goods are often perceived as status symbols. Examples may include
a mansion or penthouse apartment, a trophy spouse, haute couture
fashionable clothes, jewelry, or a luxury vehicle. A sizable collection of
high-priced artworks or antiques may be displayed, sometimes in multiple
seasonally occupied residences located around the world. Privately
owned aircraft and luxury yachts are movable status symbols that can be
taken from one glamorous location to another; the "jet set" refers to
wealthy individuals who travel by private jet and who frequent fashionable
resorts.

A common type of modern status symbol is a prestigious luxury branded

item, whether apparel or other type of a good.[8] The brand name or logo
is often prominently displayed, or featured as a graphic design element of
decoration. Certain brands are so highly valued that cheap counterfeit
goods or knock-off copies are purchased and displayed by those who do
not want to, or are unable to, pay for the genuine item.

Social Capital - The term social capital refers to a positive product of human
interaction. The positive outcome may be tangible or intangible and may
include favors, useful information, innovative ideas, and future
opportunities. Social capital is not held by an individual, but instead
 appears in the potential between social network connections between
individuals.

The term can have different meanings depending on how it's applied. In fact,
social capital is no longer narrow and local in scope. The concept is
commonly used to describe the relationships that help contribute to the
success of businesses. It is arguably considered as valuable as financial
or human capital. Networking and the use of the internet are prime
examples of how social capital works in a business sense. These allow
professionals to form social—and often global—connections in many
variations. Many jobs are filled through informal networking rather than
through job listings. That is social capital in action.

Key Points:

● Social capital is a set of shared values or resources that allows individuals

to work together in a group to effectively achieve a common purpose.
● Social capital can also be thought of as the potential ability to obtain
resources, favors, or information from one's personal connections.
● In business, social capital can contribute to a company's success by
building a sense of shared values and mutual respect.
● Social capital can manipulate people and destroy order as is the case with
drug cartels and corporations that team up to drive out the competition.

Types of Social Capital

● Bonding refers to social capital created within a group with shared

interests and goals. A neighborhood association is a good example of how
bonding works.
● Bridging, on the other hand, is the creation of social capital across groups.
When bridging is successful, individuals in the two groups discover shared
interests and goals and work together to achieve them. A neighborhood
association that links up with a local police department is an example of
how bridging works.
● Linking, similar to bridging, linking creates ties across groups, but those
that span different socioeconomic groups. Linking has been associated
with increasing one's chances of upward social mobility.
 Social Media and Online Social Networks - The internet has revolutionized
social capital, effectively creating a seemingly infinite number of social
connections. For example:

● Airbnb, Uber, and eBay users are able to use social capital to make a
selection based on the reviews of past users. The same people contribute
to social capital by leaving their own reviews later. The companies that
own those sites use reviews as an essential component of their quality
control programs.
● Social networking sites such as Meta (formerly Facebook), strengthen
bonds based on personal interests, such as hobbies, past experiences, a
shared hometown, or a previous employer.
● Social media is also a primary source of social capital for small business
owners who can showcase their products and services online as
effectively, if more cheaply, than larger corporations.
● Immersive gaming environments have allowed people from across
socioeconomic groups and demographics to convene and collaborate in
virtual online worlds, often disguised via in-game avatars. Often, these
individuals will develop friendships and relationships that extend beyond
the bounds of the game and into the real world.

d. The Consumption Patterns of Specific Social Classes

An especially significant factor that affects a person's purchasing behavior

is social perception. Example An individual from a lower income group could
prioritize the price while making a purchase, whereas an individual from a higher
income group might think about the product's performance and uniqueness. Each
of the social classes has a unique pattern of consumption, education,
employment, leisure, etc. The marketers need to know this in order to
comprehend consumer wants and develop marketing strategies accordingly.

1. Bounded- The social groups are limited by some rules that include or exclude
particular people, places, or things. They automatically comply with these
unspoken guidelines. Due to their comparable educational backgrounds,
occupations, lifestyles, etc., they constrain behavior.

2. Ordered- Every social class has a structure or strata that sets it apart from
each other in terms of wealth, rank, and reputation.

3. Contrary to Each Other- The person exclusively fits into one class, and they
act and behave appropriately. Moving from one class to another, nevertheless, is
feasible and continues throughout time. A new wealthy class has emerged and
grown throughout time. They are open system members and upwardly mobile. In
closed systems, status is inherited and engraved. They are unable to rise above
their socioeconomic class.

4. Comprehensive- that each and every member of a social class must belong
to and identify with that class.

5. Influential- Classes must behave differently from one another if various

expectations are to be placed on them.

It is obvious that there is no traditional social class structure based on the

mentioned criteria. Social classes can be broadly categorized into three groups:
upper, middle, and lower. We further divided them into four classes due to the
wide disparity by placing the working class between the middle and lower
classes.

Social Class Lifestyle Orientation Purchasing Tendencies

 Good taste Quality merchandise;
expensive hobby and
Graceful living recreation equipment,
art, books, travel
Upper Class Good things in life

Individual expressions

Interest in art and culture

Respectability, Items in fashion and

conformity, propriety, related to self
Middle Class social esteem presentation; Good
clothing, neighborhood
and house items for
children

Fun-oriented parochial Newest appliances,

sporting events
Working Class Unsophisticated taste.
Newest and biggest
Focus on possession items
and not ideas.

Close family Status symbol products:

relationships enhancing self esteem;
pseudo symbols of
No interest in world prosperity, such us used
Lower Class affairs scooters: readily
available products
Neighborhood oriented

Want immediate
gratification
e. How the Household Influences Consumer Behavior

The individual, or one of the people aged 15 or older, in whose name the housing
unit is owned, being purchased, or rented, is recognized as the householder in each
household. In order to categorize households into distinct kinds, all other members of the
household are only defined in respect to the householder. Family households and
nonfamily households are the two main categories.

Types of Households

Family Household - A family household consists of the householder and one or more
extra members who are connected to the homeowner through marriage, a child, or an
adoption. Family households include married couples with and without children under
the age of 18, single-parent homes with children, and various groupings of related adults
such as two siblings sharing a dwelling unit or a married couple whose adult kid has
moved back home. A boarder is an example of a person who can be included in a family
household who is not connected to the householder.

Non-Family Household - In non-family households, the head of the household either

lives alone or only has non-family members living with them, such as roommates or an
unmarried partner. Depending on whether partner is designated as the householder and
whether any extra members of the household are connected to the householder,
unmarried partner households can either be family or nonfamily households. Even
though a child born to an unmarried couple would actually live with both of its biological
parents, their household would be classified as a single-parent family. The household,
however, can be either a single parent family or a nonfamily household if a child is only
connected to one spouse of an unmarried couple, depending on which partner is
arbitrarily chosen to be the householder.

Family Life Cycle

The family life cycle refers to the emotional and intellectual stages a family
member experiences from childhood to retirement. You encounter difficulties in your
family life at each level that provide you the chance to develop or learn new abilities.
Developing these skills enables you to cope with the changes that almost every family
experiences.

Not everyone successfully completes these phases. Your ability to move through the
stages may be impacted by circumstances like a serious illness, money issues, or the
loss of a loved one. Thankfully, if you don't pick up a skill in one stage, you can learn it
later.

Roles of Household Members (Spouses and Children)

The stages of the family life cycle are:

1. The Bachelor Stage- Young and Single

2. The newly married Couples-young, No children

3. Full nest 1- young, married , with child

4. Full nest 2- older, married, with children

5. Full nest 3-older, married, with independent children

6. Empty - Older, Married, with no children living with them

7. Solitary Survivor - older,single,retired people.

1. Young Singles - Although earnings tend to be low, these consumers typically

have few financial responsibilities and don't feel the need to save for their futures
or retirement. Young singles may cohabitate with partners, live alone, with their
 nuclear families, or with friends, or cohabitate with other people. Many of them
discover that they spend as much money as they make on things like cars,
furniture for their first apartments away from home, clothes, entertainment,
alcoholic beverages, food while traveling, vacations, and other dating-related
goods and services. These singles may be forced to give up because some of
them have young children.
2. Newly Married Couples - Due to the fact that they frequently have two incomes
available to them to spend on one household, newlywed couples without children
are typically in a better financial situation than they were when they were single.
These families tend to spend a significant portion of their income on things like
vacations, clothing, cars, and other luxuries. Additionally, they appear to be more
susceptible to advertising and have the highest average and purchase rate of
durable goods (especially furniture and appliances).
3. Full nest I. - Parents must select whether one parent will stay at home to care for
the child or if they will both work and pay for daycare after the birth of the first
child. Either option typically results in a decrease in the family's disposable
income and a change in how the family spends its money. Families are likely to
move into their first house during this time, buy furniture and other items for the
child, buy a washer and dryer and home maintenance supplies, as well as buy
new items like baby food, cough syrup, vitamins, toys, sleds, and skates.
Families are less able to save as a result of these needs, and the husband and
wife frequently feel unhappy about their financial situation.
4. Full nest II - The youngest kid has started school, the employed spouse's income
has increased, and the other spouse frequently resumes part- or full-time
employment outside the home at this point. As a result, the family's financial
situation typically gets better, but they start consuming more and in larger
amounts. Since the family frequently purchases large-sized packages of food,
cleaning supplies, bicycles, music lessons, clothing, sporting goods, and a
computer, the children continue to have a significant influence on the family's
consumption patterns. Consumers in this stage are fond of discount department
stores (like Costco and Sam's Club).
5. Full nest III - As the family grows older and parents enter their min-40s, their
financial position usually continues to improve because the primary wage
earner’s income rises, the second wage earner is receiving a higher salary, and
the children earn spending an education money from occasional and part-time
employment.The family typically replaces some worn pieces of
furniture,purchases another automobiles, buys some luxury appliances,and
spends money on dental services (braces) and education .Families also spend
more on computers in this stage, buying additional PCs for their older children.
The family's financial situation might be more precarious than in other cases
depending on where the children attend college and how many of them want to
pursue higher education.
6. Empty Nest - older married couple living together without any children. The
financial situation is stabilized, and there are no child-related expenses. The pair
 is free to pursue their individual interests and to spend money on luxuries,
improvements, and medical care.
7. Solitary Survivor - elderly single retirees. retired people who are single after
losing a partner. Retirement can lead to a more solitary existence and a decrease
in income. Again, this alters the consumption habits and way of life of seniors.
Another thing to keep in mind is that the family life cycle concept divides families
based on demographic factors while ignoring psychographic factors (family
members' interests and opinions). The length of the family life cycle is also
influenced by free time, income, education, and other factors. These factors need
to be taken into account by a marketer. Family stages have an impact on the kind
of goods and services needed, consumers' preferences and patterns of
consumption, and the amount of consumption of particular products. The
traditional understanding of the family life cycle has come under fire for failing to
take into account the possibility that an individual may not grow up in a single
family unit. Second marriages can result in families, and these families may
include children from previous unions. Additionally, single parent homes are not
taken into account by the conventional model. In comparison to the traditional
model, the modern family lifecycle, which takes into account the existence of
working women, is more complex and useful.

It is understood that different family members carry out different purchasing

chores. The goods are purchased for the family as a whole. TV, sofa, automobile,
refrigerator, etc. The product will be purchased using family funds, which may
have multiple contributors. When funds are scarce, it may be necessary to forgo
other products in favor of an expensive item. Some family members might not
approve of the product selection and think it was an unnecessary expense.
These are the primary deciding factors in family decisions and the places where
family members prefer to buy the product. The aforementioned factors are
crucial, and once all It is possible to better formulate a recognized approach.
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