BUS630: Consumer Behavior

8a. Compare how both personal and social conditions influence how we spend our money

• Why is it important for a marketer to study how social conditions might influence buying decisions?
• Beyond necessities, why do people spend money?
• Why would a consumer buy something they do not need or want?

Many things influence how a consumer may spend their money. When the economy is strong, people will have more confidence in the economy. This stronger confidence may also lead to consumer confidence, and they may buy more during a strong economy.

Many different factors may influence a consumer to spend money. Social conditions and social status may influence buying decisions depending on the amount of money one has to spend. Social class is one factor that a marketer may consider as an influencing behavior. The higher the social class, the more money one might spend. Other factors might include cultural, personal, or psychological, and when marketing a product, a marketer needs to be aware of these factors that may influence a consumer's purchase.

Can you imagine buying something that you do not want or need? Most likely, you just answered no. However, perhaps you have purchased cookies or lemonade from a five-year-old. Or maybe you loved and bought an item in the store, only to discover you did not need or want that product. Or perhaps you bought a product only to get home and find out you already own the same product and never used it. These are all examples of how consumers might buy something they don't truly want or need.

To review, see Factors Influencing Behavior and Influences on Consumer Decisions.

8b. Identify how a person's desire to make a statement about their social class, or the class they hope to belong to, influences the products they like and dislike

• Can psychological influences determine what a consumer likes or does not like?
• Why is social status important to most people?
• How can people in a higher social class influence those in a lower class?

Imagine that you recently received a promotion that tripled your income and now find yourself in a different social class, and you have created a change in your choice of economic decisions. You can afford the car you've always wanted, or you may be able to afford to move to a bigger and better house. Suddenly, it is very important to you to prove to others that your social status has improved. Essentially, you are attempting to make a statement about who you are.

Psychological influences may also change when consumers move from one social class to another. People in a higher social class tend to influence those in a lower class, whether this is intentional or not. People in a lower class may subconsciously or consciously wish to be in a higher class. Sometimes, people in a lower class may wish to spend as though they are not in their social class.

We saw examples of this just before the 2008 real estate marketing crash, and people were in homes they could not realistically afford. During that time, there was a sense of an unrealistic social status that was important to most consumers. Consumers typically spend according to their social class but may dream of being in a higher social class.

To review, see Situational Factors and Psychological Factors.

8c. Identify how social classes are measured, how social class membership is determined, and the measurement problems that marketing managers must deal with

• What is social class?
• How is social class determined?
• How can marketers use information about social classes?

Social class is typically determined by income. In the United States, we have a lower class of people who are typically close to the poverty level, a middle class that includes the bulk of the population, and an upper class. Some measurements break out the classes into the top 10%, 5%, or 1% of earners.

Cultural diversity is another social factor for marketers to consider when analyzing consumers from diverse backgrounds and cultures.

Marketers can use this information to specifically target a social class, depending on their product or services. For example, if a marketing company is trying to promote investments, they may specifically target the upper class who are looking for a way to invest money. If the minimum investment amount is $500,000, then a marketer would not want to promote that investment to someone in the lower or middle class because they will most likely not have as much discretionary income as someone in a higher social class. Therefore, a marketer must understand who they are promoting to and what measurements they are using to determine that population.

To review, see:

• Situational Factors
• Psychological Factors
• Cultural Diversity

 

Unit 8 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• cultural diversity
• economic decisions
• psychological influences
• social class
• social conditions
• social status