CHAPTER 4
THE CHANGING AMERICAN SOCIETY:
DEMOGRAPHICS AND SOCIAL STRATIFICATION
LEARNING OBJECTIVES
LO1: Understand the critical role that demographics play in influencing consumer behavior
LO2: Define the concept of generations and discuss the generations that exist in America
LO3: Explain the concept of social stratification and the role that socioeconomic factors play
LO4: Identify and discuss the major social classes in America
SUMMARY
LO1: Understand the critical role that demographics play in influencing consumer behavior
American society is described in part by its demographics, which include a population’s size,
distribution, and structure. The structure of a population refers to its age, income, education, and
LO2: Define the concept of generations and discuss the generations that exist in America
An age cohort or generation is a group of persons who have experienced a common social, political,
LO3: Explain the concept of social stratification and the role that socioeconomic factors play
A social class system is defined as the hierarchical division of a society into relatively permanent and
homogeneous groups with respect to attitudes, values, and lifestyles. A tightly defined social class system
does not exist in the United States. What does seem to exist is a series of status continua that reflect
LO4: Identify and discuss the major social classes in America
Although pure social classes do not exist in the United States, it is useful for marketing managers to know
and understand the general characteristics of major social classes. Using Coleman and Rainwater’s
system, we described American society in terms of seven major categories— upper-upper, lower-upper,
LO5: Understand how social class is measured
There are two basic approaches to the measurement of social classes: (1) Use a combination of several
LO6: Discuss the role of social class in developing marketing strategies
Although social class may not play a role in all products or brands, it is obviously relevant in many
LECTURE TIPS AND AIDS
1) It is important for students to recognize that generations are different. The person who is 65 today is
very different from one who was 65 twenty years ago. Likewise, the person who is 45 today will not
2) Many students seem reluctant to really believe that social classes exist in any meaningful way in our
society; somehow the idea does not seem very “American.” Indicate to them that some form of social
stratification has been found in every society that has been studied; even the most ancient, primitive
ones. Social stratification was not a phenomenon invented by social scientists. Rather, it is a natural
human behavior that has been observed and has been formally named and defined by social scientists
because it helps them to better describe, understand, and predict human behavior.
A good way to get students to realize that social class does exist is to ask them to describe the town
or city that they came from. Is there a part of town that doctors and lawyers live in? Is there another
3) Table 4-5 can be used in explaining social class measurement. Have students place their fathers (or
any other person of whom they have knowledge) on such a scale to arrive at a score. You can do this
for yourself also. As an example of the potential disadvantages of multi-item indexes, present
students with two scenarios:
A person with under seven years of school who started a small manufacturing firm which later
grew into a medium-sized firm of which he/she is now president.
4) A good exercise for students is to develop their own measure of social status. I break the class up into
groups and have them develop a measure of social class by determining what criteria they would use
5) Student Handout 1 describes a view of social status based on cultural capital. After students read the
handout, have them discuss these questions:
Is this view of status in America accurate?
Student Handout 1: CULTURAL CAPITAL: AN ALTERNATE VIEW OF SOCIAL
STATUS
The traditional view of social class structure is based on the presumption that societies segregate into
differential reputational groupings based on economic position and on noneconomic criteria such as
morals, culture, and lifestyle that are sustained because people tend to interact with their social peers. The
basis for this research was “a Rockwellian image of small-town life that represents a minuscule and
declining fraction of the contemporary United States….Status construction now must deal with the
tremendous geographic mobility of American professionals and managers, the privatization of social life,
the proliferation of media and travel, and the anonymity of urban environments….”
A high level of cultural capital is acquired in upbringing in families with well-educated parents whose
occupations require cultural skills, interaction with peers from similar families, high levels of formal
education at institutions that attract other cultural elites studying areas that emphasize critical abstract
thinking and communication over the acquisition of particularized skills and knowledge. These
reinforcing experiences become embodied as ways of feeling, thinking, and acting.
In addition to tastes expressed in actions, tastes and preferences expressed in product or service ownership
or use also signal status. However, cultural tastes are signaled not in terms of the economic value of the
items but from the inferred cultural aptitude on the consumer of the item. Thus, owning abstract art
implies that the owner has the background and skills necessary to understand and appreciate the art.
REVIEW QUESTIONS
1) What are demographics?
2) Why is population growth an important concept for marketers?
If the growth of the total population slows or stops, many industries will face stable or declining
3) What trend(s) characterizes the occupational structure of the United States?
Women are increasing their participation in the labor force. Jobs are shifting to white-collar/technical
and away from blue-collar.
4) What trend(s) characterizes the level of education in the United States?
5) What trend(s) characterizes the level of income in the United States?
Cyclical: Growth in real (adjusted for inflation) per capita disposable income until stagnation in
1980s, followed by growth from 1995 to 2000, then a decline again early in this century, followed by
6) What is meant by subjective discretionary income? How does it affect purchases?
7) What trend(s) characterizes the age distribution of the American population?
The population is aging with the most rapid growth occurring in the 60 + groups. There is also growth
in the under 10 and 30–39 age segments, though to a lesser degree.
8) What is cognitive age? How is it measured?
9) What is an age cohort? Cohort analysis?
An age cohort or generation is a group of persons who have experienced a common social, political,
10) Describe each of the major generations in America.
a) Pre-depression Generation
b) Depression Generation
c) Baby Boomer Generation
The baby boom generation refers to those individuals born during the dramatic increase in births
d) Generation X
Generation X, was born between 1965 and 1976. It is a smaller generation than its predecessor or
that coming after it, namely Generation Y. This generation reached adulthood during difficult
e) Generation Y
Generation Y are the 79 million children of the original baby boomers, born between 1977 and
1994. It is the first generation to grow up with virtually full-employment opportunities for
women, with dual-income households the standard, with a wide array of family types seen as
f) Generation Z
This generation was born between 1995 and 2009. They are best characterized as teens and tweens.
They are also been labeled the Digital Natives, Generation @, and the Net Generation due to the
g) Generation Alpha
This newest generation of 28 million Americans was born starting in 2010. They are the children
of Generation Y, and likely to be an only child to their Millennial parents. They are tech savvy.
11) What is a social class system?
12) What is meant by the statement, “What exists is not a set of social classes but a series of status
continua”?
Status continua reflect various factors that society values, such as income, education, and occupation.
In our society, we judge or class people on various achievement-related continua.
13) What underlying cultural value determines most of the status dimensions in the United States?
Achievement.
14) What is meant by status crystallization? Is the degree of status crystallization relatively high or low in
the United States? Explain.
15) Briefly describe the primary characteristics of each of the classes described in the text (assume a high
level of status crystallization).
a. Upper-upper – inherited wealth, highly educated but may not work, fine houses and original art,
international travel, generally “out–of–sight” except to lead charities or enter politics.
c. Upper-middle – generally comprised of families who have achieved social position by their
occupation and career orientation. Careers (not jobs) are very important to these individuals.
Respectable local leaders who live in the nice parts of town
d. Middle class – composed of white-collar workers (office workers, school teachers, low-level
managers) and high-paid blue-collar workers (plumbers, factory supervisors). They generally
live in modest homes and are more likely to get involved in “do it yourself” projects. With
limited income, they must balance their desire for current consumption with aspirations for
future security.
g. Lower-lower – the very poor, least educated, and rarely employed. They live on social welfare
on a day-to-day basis.
16) What is meant by the phrase class to mass and how does it relate to upward-pull?
A movement by retailers to offer less expensive “new luxury” goods to less affluent segments. These
17) What ethical issues arise in marketing to the lower social classes?
Marketers frequently ignore these classes yet they have needs just as do other social groups.
18) What are the two basic approaches used by marketers to measure social class?
Multi-item and single-item indexes.
19) What are the advantages of multi-item indexes? The disadvantages?
Advantages
⎯
can provide a more detailed, comprehensive measure of overall class standing because
it considers more variables.
20) Describe the Hollingshead Index of Social Position. Why is occupation weighted more heavily?
Would this weighting hold in other cultures?
Occupation is rated on a seven-point scale and then weighted by multiplying the rating by 7. This
score is then added to an educational score that was obtained by rating level of education on a
Discussion Questions
21) Which demographic shifts, if any, do you feel will have a noticeable impact on the market for the
following in the next 10 years? Justify your answer.
a) Upscale restaurants
d) Internet shopping
e) Green products
For all except “green” products, age will probably have the most impact. Have the students discuss
how firms in each product category should plan for the age shifts that we know will occur in the next
22) Given the projected changes in America’s demographics, name five products that will face increasing
demand and five that will face declining demand.
a. Increasing numbers of people in the 60+ age group will strengthen the demand for (1) luxury
cars, (2) nice restaurants, (3) financial services, (4) resort vacations, (5) health and diet foods and
products, (6) in-home health care, and (7) pharmaceuticals.
23) Why do the regional differences shown in Figure 4-1 exist? What are the implications of such
differences for marketers of products such as soft drinks?
There is more to geographic differences than distance. While students generally understand the
24) Will the increasing median age of our population affect the general tone of our society? In what
ways?
Yes. There may be a decrease in “youth” orientation. This will be reflected in a decrease in demand
for youthful products and probably less interest in and success with youth-oriented advertising
appeals. Basically, one could expect to see a more settled, serious, and even “tone” to our society.
Change for change sake will not be as acceptable.
25) Respond to the questions in Consumer Insight 4–1.
Q1a – Technology consumption, media habits, cause marketing, age, sex, ethnicity, and general outlook
were segmentation basis variables used in this study.
Q2 – Answers will vary. Students will often be able to easily identify which of the segments into which
they or another person would fall. The key is to have them discuss why. This could be a good exercise to
have students discuss in small groups and then share their insights with the class. Sometimes, students
may say that their target person actually fits more than one segment, which also provides for fruitful
discussion.
the basis for a good class discussion. If they feel like there is a missing segment, have them explain and
describe that segment.
26) Which demographic variable, if any, is most related to the following?
The answers below are the author’s opinion and are not based on research.
a) Watching extreme sports on TV: Age probably the major influence. Having teenage children at
home may also encourage parents to watch.
c) International travel: Education then income. Occupation also is related.
d) In-home chef: Education, income, and social class since clearly income is needed to afford this
service but social class attitudes may play a major part as well (even when income is sufficient).
27) Describe how each of the following firms’ product managers should approach the (i) pre-Depression
generation, (ii) Depression generation, (iii) baby boom generation, (iv) Generation X, (v) Generation
Y, (vi) Generation Z, and (vii) Generation Alpha.
a) Pepsi
b) Panera Bread
c) The Golf Channel
d) dotdash.com
e) The Humane Society
f) iPod
g) Facebook
h) Crest Whitener System
I find it most useful to have the students do brief analyses of several of these rather than an in-depth
28) Respond to the questions in Consumer Insight 4–2.
Q1 – Social class is tied to a whole array of underlying causes and consequences, all of which may in
some cases be a much better predictor of specific behaviors than social class itself. Understanding the
specific mechanisms can help marketers create more effective strategies.
Q2 – Students may speculate on a number of factors including income. Income is one of the factors
used to assess social class and it can be a limiting factor in affordable healthy foods. Marketers may
profitably locating retail outlets in such geographic locations. You might push students to brainstorm
on how both “for profit” and “not for profit” organizations can overcome such barriers, perhaps
drawing on the example of The 99 Cent Store.
29) How will your lifestyle differ from your parents when you are your parents’ age?
This generates an interesting discussion that will integrate both age cohort differences and
demographic changes. You may want to talk about how your lifestyle differs from your parents. Get
30) How could a knowledge of social stratification be used in the development of a marketing strategy for
the following?
a) Jeans
b) Expensive jewelry
f) Habitat for Humanity.
First, based on knowledge or research determine the needs and desires of each social class or strata
with respect to the product category under consideration. I would have the students use the
descriptions of the classes in the text and then speculate on the needs of each relative to one or two on
the products. You can assign teams of two or three students to prepare a marketing strategy for one of
the products for one social class, another team for a second social class, and so forth. Then have each
team present their plans in class. Discuss the differences between the plans and the reasons for them.
The distribution must match the social class’ preference for type of retail-purchase environment.
31) Do you think the United States is becoming more or less stratified over time?
Historically, increasing educational levels and increasing incomes for most Americans pointed to a
less stratified society over time. However, in recent years the gap between those “making it” and
32) Do your parents have a high or low level of status crystallization? Explain.
You might start with an example of high (MD/$600,000 a year income/lives in best part of town) and
33) Based on the Hollingshead two-item index, what social class would your father be in? Your mother?
What class will you be in at their age?
You might ask this question during the measurement discussion in your lecture, letting students work
out their own answers. Discuss the implications of status differences between husbands and wives.
34) Name two products for which each of the three following demographic variables would be most
influential in determining consumption. If you could combine two of the three, which would be the
second demographic you would add to each? Justify your answer.
a. Income: luxury car, expensive original art collection, expensive vacation home, first-class
airplane tickets – all are expensive, nonnecessity items.
35) Name three products for which subjective discretionary income might be a better predictor of
consumption than actual income. Justify your answer.
SDI has proved to be a better predictor of purchase behavior. How much people perceive they have to
spend is more important than their actual discretionary income. If they perceive that they have
36) How do you feel about each of the ethical issues or controversies the text described with respect to
marketing to the lower classes? What other ethical issues do you see in this area?
Be certain not to impose your view on the students though I find they appreciate it when I make my
own view known (often after arguing from the opposite direction). The fundamental debate is
between the responsibility of the firm versus that of the larger society (government) versus complete
37) Is it ethical for marketers to use the mass media to promote products that most members of the lower
classes and working class cannot afford?
This should provide an interesting discussion for the class. The question really hinges on whether or
not marketers are specifically trying to promote these types of products to those classes. Some will
38) Would your answer to Question 37 change if the products were limited to children’s toys?
Does this now make it a “public policy” issue, i.e., protecting a group that cannot watch out for itself?
39) Name five products for which the upward pull strategy shown in Figure 4-3 would be appropriate.
Name five for which it would be inappropriate. Justify your answers.
b. Inappropriate use – gasoline, bread, cereal, dish soap, and soft drinks. These are staple products
consumed across social classes. They have no unique social class association.
40) What ethical implications arise from urban renewal efforts such as those in Harlem?
Such efforts often replace affordable housing, restaurants, and shops with those that are more