CM

Chapter 4: The Changing American Society – Demographics and Social Stratification

Demographics and Generations

  • Understand the critical role that demographics play in influencing consumer behavior.

  • Define generations and discuss the generations that exist in America.

  • Explain social stratification and the role socioeconomic factors play.

  • Identify and discuss the major social classes in America.

  • Understand how social class is measured.

  • Discuss the role of social class in developing marketing strategies.

  • Key data points to remember:

    • Important demographic indicators include Population Size and Distribution, Occupation, Education, Income, and Age. These drive consumer behavior and marketing targeting.
    • Age distribution projections are based on cohort analyses and official projections (e.g., U.S. Census projections for 2017–2060).
    • Age groups commonly used: 18\text{-}24,\;25\text{-}34,\;35\text{-}44,\;45\text{-}54,\;55\text{-}64,\;65+.

  • Generations and cohort analysis (definitions and purpose):

    • A generation or age cohort is a group of people who have experienced a common social, political, historical, and economic environment.
    • Cohort analysis describes and explains attitudes, values, and behaviors of an age group and predicts future attitudes, values, and behaviors.

  • Generations covered in the material:

    • Pre-Depression
    • Depression
    • Baby Boom
    • Generation X
    • Generation Y
    • Generation Z
    • Generation Alpha
    • Mature Market (context for older cohorts)

  • How to target the mature market (Gerontographics):

    • Four segments:
    • Healthy Indulgers
    • Ailing Outgoers
    • Healthy Hermits
    • Frail Recluses

  • Boomers (Baby Boom generation) – key characteristics:

    • Higher income, higher education than prior generations.
    • More tech savvy; retirement defined differently.
    • Strong market for appearance-related products.
    • Often alienated by emphasis on youth in ads.

  • Baby Boom generation – aging into their 60s and 70s:

    • Increasing likelihood of major or chronic health problems (e.g., incontinence) affecting activity.
    • Example product category: products that support active lifestyles without disruption, such as Depend undergarments.

  • Generation X (Gen X):

    • Smaller in size; entrepreneurial; less likely to devote life to a large corporation.
    • Highly educated; more college attendance and graduates than previous generations; women more educated than men.
    • Cynical and sophisticated about products, ads, and shopping; more diverse and open to diversity; more tech savvy.
    • Empowerment of Xer women extends to home improvement interests (e.g., Home Depot ads targeting Gen Xers).

  • Generation Y (Gen Y / Millennials):

    • Hispanic segment larger than previous generations; focus on completing college, starting careers, financial stability.
    • Perceived distinctive traits: technology use, music and pop culture, tolerance, intelligence, and clothes.

  • Generation Z (Gen Z):

    • Known as Digital Natives, also called Gen @, iGeneration, Net Generation.
    • Purchase power around 140\text{ billion}.
    • Emphasize self-expression and authenticity; want to interact with brands (not be talked at).
    • Brands should enable creativity and provide controllable visibility (example: Snapchat platform and its ad approach).

  • Generation Alpha:

    • Tech-savvy; likely the child of Millennials; often an only child to Millennial parents.
    • Buying power around 18\text{ billion}.
    • YouTube Spotlight and other digital media influence on this generation.

  • Social rank and social class concepts:

    • Societal rank is one's position relative to others on dimensions valued by society; also referred to as social class or social standing.
    • A social class system is a hierarchical division of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles.
    • Distinct social classes do not exist in the U.S. or most industrialized societies; instead, there are graded hierarchies.
    • Status dimensions include parental status, education, occupation, and income; these set lifestyle limits (e.g., residence).
    • Status crystallization: the consistency of these status dimensions; moderate in the U.S. (
    • Figure 4-2 emphasizes that social standing is derived and influences behavior.

  • Social stratification in the United States – structure and marketing relevance:

    • The Coleman-Rainwater social class hierarchy provides a framework for class structure (Table 4-4 referenced).
    • Upper classes as important market segments for certain products and as symbols of the “good life” to upper-middle class consumers.
    • Example: TAG Heuer luxury watch ad signals status and targets upper-class consumers (Leonardo DiCaprio as emblem of wealth).
    • Upward pull strategy targeting Middle Americans (middle class) depicted in Figure 4-3.
    • Middle Americans as primary targets for home improvement, garden, and auto parts outlets (e.g., Calloway’s Nursery rewards program). They seek bargains without sacrificing quality.

  • Measuring social status (two basic approaches):

    • Single-item index: uses one dimension (often education, occupation, or income).
    • Multi-item index: uses several dimensions to derive an overall status measure (more accurate for status as a social variable).
    • Marketers often view education, occupation, and income as direct influencers of consumption, rather than as determinants of an abstract social status that then influences behavior.
    • Conclusion: If marketers are not interested in overall social standing per se, they will focus on demographic characteristics as direct influencers on consumer behavior.

  • Specific indices for measuring social status:

    • Single-item index components: \text{Education},\;\text{Occupation},\;\text{Income}.
    • Multi-item index examples:
    • Hollingshead Index of Social Position (ISP)
    • Index of Social Position (ISP) (alternative naming)

  • Key figures and references mentioned in the slides:

    • "Projected 5-Year Age Groups and Sex Composition of the Population: Projections for the United States 2017–2060" (U.S. Census Bureau, 2017, tab. 3).
    • Population age distribution visuals: age groups 18–24, 25–34, 35–44, 45–54, 55–64, 65+ (Fig. 4-7 in slides).
    • Demographics assets and stock imagery credits (for slide content): Shutterstock, Getty Images, etc.

  • Practical implications for marketing strategy:

    • Targeting upper classes with luxury branding and status signaling; using celebrity endorsements to convey prestige.
    • Targeting middle class with value-driven offers and homeowners’ lifestyle framing (home improvement, gardening, automotive parts).
    • Tailoring messages to generations based on values, media habits, and technological familiarity (e.g., Gen Z via authentic, interactive, social platforms; Gen X with practicality and skepticism; Gen Y with tech and adaptability).
    • Recognizing the rising influence of demographic segments (e.g., growing Hispanic segment among Gen Y) on product design, communication, and distribution.

  • Connections to broader concepts and real-world relevance:

    • Demographics are foundational inputs for market segmentation, targeting, and positioning (STP) in marketing.
    • Social class intersects with access to resources, lifestyle choices, and brand perception.
    • The evolution of generations informs how firms allocate media budgets, product development, and channel strategies.
    • Ethical considerations: avoid stereotyping, respect privacy in using demographic data, and consider inclusivity across generations and social classes.

  • Equations and LaTeX notes to memorize:

    • Age groups representation: ext{Age Groups} = {18\text{-}24,\;25\text{-}34,\;35\text{-}44,\;45\text{-}54,\;55\text{-}64,\;65+}
    • Purchase power example: Gen Z has about \$140\text{ billion} in purchasing power.
    • ISP and Hollingshead indices are multi-item measures of status (no single numeric formula provided in the slides, but remember their names and purpose).

  • Quick recap of core terms to know for the exam:

    • Generations: Pre-Depression, Depression, Baby Boom, Gen X, Gen Y, Gen Z, Gen Alpha
    • Cohort analysis
    • Social stratification and status crystallization
    • Social class measures: single-item vs multi-item index; Hollingshead ISP
    • Coleman-Rainwater social class hierarchy (and its marketing implications)
    • Upper class vs middle class consumer behavior signals
    • Mature market segmentation (Healthy Indulgers, Ailing Outgoers, Healthy Hermits, Frail Recluses)
    • Brand examples and marketing narratives tied to class (TAG Heuer, Home Depot, Calloway's Nursery, Snapchat)