Categorization of different classes for marketing strategy

Research studies have attempted to stratify social classes in the United States using various measurement approaches. Generally, three methods have been utilized; the subjective method, the reputational method, and the objective method.

The subjective Method:

In this approach, individuals are asked to rank themselves in the social class hierarchy. However because most people are reluctant to categorize themselves as either lower or upper class, the middle class ends up with an unrealistically large share. Today, file clerks as little as $ 8000 and lawyers making as much as $80,000 think of themselves as middle class, although sometimes with upper and lower modifiers.

The Reputational Method:

This approach asks members of a community to rank each other in the status system. Because citizens must know each other in order to rank each other, this approach is limited to small communities and, therefore cannot be widely used by marketers.

The objective Method:

Individuals are ranked on the basis of certain objective factors and are positioned accordingly in the social status hierarchy. For the marketer who is seeking only suggestive evidence of class’s impact on a product area, a simplified proxy measure is acceptable. The Computerized status Index (CSI) was developed by Social Research Inc., and has been used successfully since the late 1960s. In this recent version, occupation is weighted double when computing the total score. For unmarried respondents education as well as occupation would be given double weight. Status interpretation of the total score for conventional married couple cases with male household heads aged 35 to 64 would be as follows:

Upper American 37 to 53; Working class 13 to 23

Middle class 24 to 36; Lower American 4 to 12

Remember, such an abbreviated scale will not produce a correct social class placement for each household. As one writer cautions, Social class is a conceptual tool, and lacking precise definition is ultimately not susceptible to perfect measurement nor to absolute standards of validity in case placements. Perhaps the best known early study an objective approach was done by W Lloyd Warner and his associates. Warner discerned a six class system of stratification based upon research conducted in several small communities. He categorized the six classes as follows: upper – upper, lower upper, upper-middle, lower middle, upper lower and lower-lower.

Warner’s categorization of classes remained popular for decades until the 1970s when dramatically changing demographic and social trends lessened its applicability to current society. Two recent views of the status structures are presented. The views appear to have much in common since they both acknowledge three main groupings of Americans – upper, middle and lower – and assign almost identical proportions of populations to each. However, the two views are based on different classificatory principles. Gilbert and Kahl gave much attention to capitalist ownership and to occupation, with prestige, association, and values as derivatives. Coleman and Rainwater take the social psychological approach of Warner to construct national status hierarchy. It is based on personal and group prestige and reflects how people interact with one another – as equals, superiors or inferiors. In the Coleman Rainwater view, identification is influenced most heavily by educational credentials and occupation (including income as its success measure) but ultimately relates to a person’s social circle of acceptance.

Problem in social Class measurement:

In spite of the many approaches used to measure and categorize social classes, there are a number of problems with the concept of doing this. An analysis of the major research done on this topic has found important shortcoming. The following are a few of the problem areas often associated with social class measurement done by marketers:

1) The ranking of social class is based simply upon an average of the person’s position on several status dimensions. This ignores the inconsistencies which arise from an individual ranking high on dimension (such as income) but low on another (such as education.)
2) A person’s social class is assumed to be stable, and thus the effects of mobility are ignored.
3) An individual identifies only with the social class in which she or he is categorized thus ignoring reference group effects from other classes.
4) The social class of an entire family may be measured by examination of characteristics of only the adult male wage earner, thus ignoring characteristics of to other family members, particularly the employment and education of the adult female in the family.

Resolution of these and other problems would make the concept of social class a more useful one for marketers.

Although the size of different classes may vary depending on the classification method used and may shift over time, it is nevertheless quite important to realize that the bulk of the market for most products exists in the broad upper and middle class groups. The very highest class is made up of only 1% of the population; because of its wealth, it is important to the marketing if certain luxury items. However, this group is too small in number to provide the focal point for most marketers. On the other hand, at the lowest end of the class spectrum one generally finds a market that, even though sizable, does not have sufficient income for many products. Therefore, most consumer goods marketers concentrate their major attention on the remaining groups.