BUS112 Chapter 13: Subculture and Social Class

*The Mature Market*

*Mature Market* = consumers over age 55 - one of the most rapidly growing subcultures in American society - nearly 80% of the current US population is expected to live until their late 70s - Between now and 2020, the number of people age 50 or older will increase by 74% (as baby boomers continue to age), whereas the number under age 50 will increase by only 1% - Older people are shown working, playing tennis, falling in love, and buying cars - Only 5% of Americans over 65 are institutionalized; therefore, most are staying healthy and active much later into their lives than ever before - Free of most financial burdens associated with child rearing, mortgages, furnishing - Have more time to enjoy entertainment and leisure activities

*Social Class*

*Social Class* = refers to a national status hierarchy by which groups and individuals are distinguished in terms of esteem and prestige 1) Upper (14% of population) 2) Middle (32% of population) 3) Working (38% of population) 4) Lower (16% of population) - Identification with each social class is influenced most strongly by one's level of education and occupation (including income as a measure of work success) - Social class is also affected by social skills, status aspirations, community participation, family history, cultural level, recreational habits, physical appearance, and social acceptance by a particular class - Social class is a composite of many personal and social attributes rather than a single characteristic such as income or education - The upper class may well be socially secure and not find it necessary or desirable to purchase the most expensive brands to impress other people - Middle-class people, on the other hand, often engage in such conspicuous consumption. *Social Class vs. Income* - There has long been a controversy as to whether social class or income is the better variable for use in consumer analysis - Recently consumer researchers have recognized that each variable has its advantages and disadvantages, and the choice among using social class, income, or a combination of the two depends on the product and the situation

*Subcultures*

*Subcultures* = are distinctive groups of people in a society that share common cultural meanings for 1) Affective and Cognitive responses (emotional reactions, beliefs, values, and goals) 2) Behaviors (customs, scripts and rituals, behavioral norms) 3) Environmental factors (living conditions, geographic location, important objects) Marketers can combine demographic distinctions to identify smaller and more narrowly defined subcultures (affluent black consumers living in the South)

*Overview*

- How changing demographic characteristics can affect marketing strategy - Two aspects of the macro social environment: subcultures and social class *Culture* = is usually analyzed at the level of a country or an entire society - *Subculture* = are segments of the society - *Social Class* = are segments of the society --> both are part of the larger society and thus are influenced by the overall culture --> useful for segmenting markets, understanding the shared cultural meanings of large groups of consumers, and developing targeted marketing strategies 1) Discuss concept of subcultures 2) Describe several important subcultures found in the US (and elsewhere in the world) 3) Draw implications for marketing strategy 4) Examine the concept of social class by describing the social class structure of US society

*Ethnic Subcultures*

- Increases in the minority subcultures are expected to continue so that by 2010 about 1/3 of American children will be black, Hispanic, or Asian - the most ethnically diverse regions in the country are in the Southwest and the South ; the least diverse are in the Midwest, where the proportion of whites may exceed 90% - Three major ethnic subcultures in the US: Black, Hispanic, and Asian *The Black Subculture* = he black or African American subculture is the largest minority group in the United States, with some 40.7 million people and about 8.5 million families (about 13 percent of the total population), a market worth about $500 billion annually. - The diversity in the African American subculture suggests marketers should further segment the black market based on factors such as income, social class, or geographic region *The Hispanic Subculture* = According to 2007 statistics, approximately 44.3 million Hispanics live in the United States (about 15 percent of the total population).27 Hispanics are people with Spanish-speaking ancestry from such places as Mexico (at 66 percent, by far the largest group in the United States), Puerto Rico, Cuba, and various countries in Central and South America - The Hispanic subculture is diverse, and reaching Hispanic consumers efficiently and effectively can be difficult. Some Hispanics are third- or fourth-generation U.S. citizens and are well assimilated into American culture - Other Hispanics retain much of their original culture and may speak mostly or only Spanish. *Asian Subculture* = Although only about 4.4 percent of the population in 2007, Asian Americans are perhaps the most rapidly increasing ethnic group in the United States - The population of people of Asian ancestry increased 80 percent in the 1980s (largely because of increased immigration), growing from 3.8 million in 1980 to about 7 million in 1989 to about 13.3 million in 2007, representing a purchasing power of about $110 billion. - Most Asians (56 percent) live in the West, particularly in California (13 percent of Californians were Asian in 2000). Asian Americans are highly urbanized, with 93 percent living in cities (three-quarters of the 3 million Californian Asians live in the Los Angeles basin or the San Francisco Bay area) - Asian Americans are a prime market because they are more affluent than any other racial or ethnic group. In 1999 the median income of an Asian American household was $51,000, compared to $44,500 for whites, $33,700 for Hispanics, and $29,500 for African Americans. *Gender as a Subculture* - For some marketing purposes, gender differences may be significant enough to consider the two sexes as separate subcultures - Compared to most men, most women seem to value caring over controlling, sharing over selfishness, and cooperating over dominating. Many marketers may find it useful to develop different marketing strategies for the male and female subcultures. - By the late 1990s, more marketers began to see women as a distinctive subculture and key market segment. Women control approximately 60 percent of U.S. wealth and influence more than 80 percent of all purchases *Income as a Subculture* - People at different income levels tend to have quite different values, behaviors, and lifestyles - Income is used to further segment a subculture defined on some other characteristic (age, ethnic group, region) - Most poor Americans are white. Affluence doesn't necessarily increase with age, either. - Marketers often divide American households into three income categories: 1) *Down-Scale* (under $33,000 income per year) 2) *Middle income* ($33,000 to 55,000 per year) 3) *Upscale* (over $55,000 per year) - The Mass market is downscale, which partially accounts for the huge success of discount retailers such as Wal-Mart - very profitable *Acculturation Processes* = A process of acculturation begins when a person from one culture moves to a differ- ent culture or subculture to live and work - refers to how people in one culture or subculture understand and adapt to the meanings (values, beliefs, behaviors, rituals, lifestyles) of another culture or subculture - *Consumer Acculturation* = refers to how people acquire the ability and cultural knowledge to be skilled consumers in different cultures or subcultures - About 10 percent of Americans move to a different region of the country (most of these people are college graduates), and they are likely to face some acculturation problems as they learn a new regional subculture. - Acculturation is important for marketing managers, who must try to understand the cultural meanings of consumers in societies and subcultures different than their own. - *Cultural Interpenetration* = The degree to which immigrants, movers, and marketers become acculturated into a new culture or subculture; the amount and type of social interactions they have with people in the host culture *Four Stages of Acculturation* 1) *Honeymoon Stage* (shallow and superficial stage) = people are fascinated by the exotic foreign culture or subculture 2) *Rejection Stage* (where cultural conflicts are maximal) = they recognize that many of their behaviors and meanings may be inadequate for acting in the new subculture 3) *Tolerance Stage* (as they learn more cultural meanings and behaviors, they may begin to appreciate the new subculture, and cultural conflict will decrease) 4) *Integration Stage* (adjustment to the subculture is adequate, although acculturation need not be complete or total; people are able to function satisfactorily in the new culture or subculture) *Interestingly, immigrants who join families already living in the United States tend to be more passive and penetrate less deeply into American culture than the more innovative family members who were the first to come to the United States.*

*AGE SUBCULTURES*

- Marketers must be cautious about segmenting consumers based on their actual age bc many adult American consumers think of themselves 10 to 15 years younger than they really are - Thus their behaviors, affect, and cognitions are more related to their psychological age than to their chronological age - *Cognitive Age* = the age one thinks of oneself as being rather than chronological or actual age - Three Age Subcultures: teens, baby boomers, and the mature market *The Teen Market* = has been gaining affluence while fluctuating in size - Teenagers spent more than $115 billion in 2000 - Teenagers do a large portion of the grocery shopping for the family - The potential to develop brand loyalty that may last a lifetime (30% of women ages 20-34 said they made a brand decision as a teenager and continued to use the brand to the present) *Baby Boomers* = people born between 1946 and 1964 and is the most lucrative and challenging marketers have ever seen - Boomers are in their late 40s to mid 60s and in their prime earning and spending years - This market is the largest and most affluent in history and will have a major economic impact for the next 30 years - Over the next decade, baby boomers will account for about half of all discretionary spending - Group is identified as having a blend of "me-generation" and old-fashioned family values and as strongly influencing the values of other groups - Group emphasizes quality and is far less concerned with bargain hunting than their parents were - 46% has completed college, 2/3 of baby boomer wives work - Although boomers had less kids, there was still a baby boomer echo that gave way to an increase in births in the 1990s

*GEOGRAPHIC SUBCULTURES*

1) *Physical Environment* = topography, climate, natural resources are different 2) *Social Environment* = economics, population demographics, lifestyles are different - The US is a polycultural nation, a mosaic of submarkets and subcultures (i.e. Wonder Bread sells best in NY, whereas snack nuts sell best in Portland, Maine; Seattle leads in sales of "healthy" foods but is also tops in Hershey's chocolate bars) - Coping with this diversity requires attention to regional subcultures *How to Analyze the US in Terms of Geographic Subcultures* - Joel Garreau divided the North American continent into nine geographic areas that he labeled the "nine nations" of North America, where he argued that a variety of environmental factors (economic, social, cultural, political, topographical, and natural resource factors) combine to form these nine areas - Despite some criticisms, this framework may be useful for some products and services in developing specific marketing strategies to appeal to consumers in each of the nine areas *Borderland Regions* - "We're not the US and we're not Mexico. We're different. We think we gather the best of both cultures." - Successful marketing strategies recognize the Hispanic culture as the major influence in the borderlands (i.e. many signs and store names are in Spanish, prices are often given in both pesos and dollars, and most stores accept either currency) --> Hispanic families tend to be large; therefore, grocery stores usually stock big sizes including 50 pound sacks of rice

*Analyzing Subcultures*

Subculture analysis is often done in stages: 1) A broad subculture is identified based on some general demographic characteristics (black Americans, elderly Japanese, middle-income Italians) 2) Depending on the marketing purpose, this broad group can be further segmented into sub-subcultures based on other demographic characteristics (i.e. affluent, middle-income, or poor Americans; elderly Japanese who are healthy vs. those who are ill; middle-income Italians living in large cities or those in small towns) 3) If deemed necessary, could continue creating ever smaller and more narrowly defined subcultures - careful research and thoughtful analysis are necessary to develop a clear understanding of subcultures - confusion came about in the 1980s when a narrow subcultural group, yuppies gradually came to mean rich, selfish youths that became virtually synonymous with the baby boomer generation even when they only were a mere 5% of the baby boomers (4 million yuppies) - marketers examine the content of the subculture by describing the cultural meanings shared by members of the subculture (esp. their values and lifestyles) - marketers seek to identify the typical characteristics, meanings, and behavioral tendencies shared by people in those groups - however, members of a black or elderly subculture are quite different; therefore, how fine should the distinctions be? (i.e. blacks have about 35 different skin colors compared to about 18 for whites)