Introduction
There has been an increase in the disparities of income and social class between consumers across different societies and countries of the world. Consumers are segmented based on their product preferences, growth of technology and globalization degree and location, religion and cultural orientation, lifestyle trends and level of disposable income. Consumers of different social classes and levels of income have different buying behaviors and this scenario is a function of marketing orientations that are taken to meet expectations and demands or needs of different customers based on their tastes of products and this influences manufacturer’s strategies in order to secure their products from becoming obsolete and developing market penetration strategies to increase their market share. Consumers of different social classes associate themselves with distinct products that are characteristic of the social class. This is popular in the urban areas where consumers of a higher social class reside in up market areas while those of the middle or a low class reside in less prestigious residential areas. This leads into different consumer strata.
Statement of the problem
There are many products in the market that have very low movement volumes and this is due to improvement of technology in products and services that makes branded products to get more customer preference for their perceived improved quality. Many firms are getting lesser market share for their products due to marketing strategies that do not factor the needs of a social class and therefore their products penetration in the market is very low. Companies are registering low sales volumes due to low movement of their products at the retailer level. Either, the wrong products are sold to the wrong social class or preferences of the customers have changed due to effect of technological growth on products and services.
Objectives of income and social class
- To investigate how income affects the purchasing power of consumers.
- To examine how the social class and lifestyles influence the consumers buying behavior.
- Social class and life styles influences a customer to buy.
- To determine how income can determine segmentation of the market.
Hypothesis of the study
- There is no significant effect of income in the purchasing power of consumers.
- There is no significant effect of age in determining the purchasing pattern of consumers.
- There is no significant influence of social class and lifestyle on the buying behavior of consumers.
- There is no significant effect of variations in income level of consumers in segmenting markets according to price.
Significance of the study
The study will provide in-depth knowledge on different consumer purchasing behavior as a function of cultural factors, lifestyle orientation, availability of disposable income, level of literacy as a function of demand for quality without regard to price of product, geographical location and technological advancement and customer user friendliness as well as value that the customer derives from the product. The study will position manufacturers to produce products that are tailored for specific market segments as well as providing marketers with insights on how to plan and execute their marketing strategies to meet expectations of customer segments and enable marketing strategies to be developed that have effective market penetration ability as a function of competitive market share.
Theoretical framework
There exists opposing forces in the life of individuals, groups, social structures and society in general that affect purchasing power and behavior or purchasing trends. All members in society do not have the same values, interests or expectations and these may vary according to one’s position, privileges, ability, class and wealth. An agreement tends to appear among those who share similar privileges.
Literature review
Kotler and Armstrong (1996) and Christopher and Cunningham (2008) argue that the consumer’s age influence buying behavior. This is because different age groups have different lifestyles and levels of income, as well as tastes and preferences. Sometimes an individual’s social class may be achieved through his age and how much he has achieved in life. Porter (1980) and Sirgy (2008) propose that there is a need for companies to understand the income and social class of their consumers for easy segmentation of the market which is aimed towards improving their competitive advantage.
Through a comparison of low income, high income and social groupings, it is possible to determine products which are bought as a result of a social class than income and vice versa. Myers and Mount (1973), Motaher, Visa Heinonem and Zahidul (2008), Roberts and Khaire (2008) all observe that a great deal has been made to determine the importance of social class in the marketing of consumer goods and services. Income and social class have never been evaluated more to determine their significance in marketing.
Slocum and Mathews (1970) and Kumbhakar and parmeter (2008) suggest that social class influence consumers to make buying decisions more than their level of income. This is because people will like to be associated with their friends of the same social class or to be matched with them in their life achievement. Porter (1980) and Slocum and Mathews (1970) also approve similar view by arguing that consumers will buy to match their peers or people of the same class.
Methodology
Research design
There research design used in the study was a descriptive survey. It suggests that descriptive studies are not only restricted to fact findings, but may often result in the formulation of important principles of knowledge and solution to significant problems. It is a method of collecting information by viewing or administering a questionnaire to a sample of individuals.
Research site and population
The research was carried in the city of band ford and a population of 200 people was used. Among those selected 100 where men and 100 were women all selected across all the age divide. They responded to different influential factors that affect their purchasing behaviors. The selected population was interviewed well using well structured questionnaires.
Sample selection and research instruments
A quota sampling technique was used to select representation of the whole city. This is because it assures a good representation of the population over a wide area. The research instruments used were questionnaires, structured interviews and focused group discussions. The respondents were allowed to make there responses according to their real life experiences. They did this by answering oral questions and also written questions.
Data collection techniques
Secondary data was obtained from books, journals and the internet. Primary data was collected from the field by interviewing the respondents by using a well structured questionnaires and interviews.
Data presentation and analysis
Data was analyzed using statistical systems by the use of a table (table 1) which indicated the number of respondents interviewed and there answers. A quick impression summary was used to conclude the results and the final data presented in bar graphs.
Summary of the findings
Among the interviewed women 60 said their age determined what they wanted to buy while 70 men said that their age determined what to buy and how much to purchase. Older women had expressed there views that they will not buy goods for pleasure an idea that was also approved by men of the same age. (See table 1). Also 70 women said they bought according to their lifestyle and social class. 80 men also said they purchased due to social class. This implied that social class influenced both sexes when it came to purchase decision making. 80 men said they were influenced by their level of income to purchase while 90 women were influenced by their income. Lastly under price determination, 90 men were purchasing due to price and 85 women expressed their willingness to buy due to influence of price. The research also established that the number that responded supporting the questions in discussion was more than the number that did not respond supporting the ideas in the research discussion.
Conclusion
The research established that the level of income will influence an individual to purchase. This is because more women and men will buy because of their income. Those individuals with higher incomes will buy more goods and frequently because of their purchasing power. Those with low levels of income will purchase in small quantities less frequently due to their low purchasing power. The research also established that social class and life styles usually influence people to buy products so that they can be associated with people of their class. There are those consumers who will buy goods because they are associated with social class so that they can be recognized and respected in the society.
This concept was supported by many women and men during the research. The age of the buyer also determines what and how much he or she is going to purchase according to the research. Tastes and preferences will change and also vary according to age of an individual. The research also established that variations in income level helps in segmenting markets according to price. Consumers with higher incomes will buy goods at higher prices with ease compared to low income consumers who will buy rationally and within the limits of their income.
Recommendations
The level of income of individuals should be analyzed by marketers when targeting consumers and segmenting their markets according to price. The age of the consumers in the target market should also be evaluated so as to target them with the right products and services. Therefore income and social class of people should be analyzed well by marketers to enable them to set a good marketing strategy. Therefore the income and social class in each society should be considered when planning to launch marketing activities like sales promotion, advertising, pricing distribution, market segmentation, product development and while doing marketing communications.
Bibliography
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- Kotler, P. and Armstrong,G. Principles of Marketing. 7th edition. Printice Hall, 1996.
- Motaher Hossain, Visa Heinonen, K. M. Zahidul Islam. Consumption of foods and foodstuffs processed with hazardous chemicals: a case study of Bangladesh. International Journal of Consumer Studies32:6, 588-595, 2008.
- Porter, M.E. Competitive Strategy. The Free Press,Coller Macmillan, 1980.
- Roberts, P. W., Khaire, M. Getting known by the company you keep: publicizing the qualifications and former associations of skilled employees. Industrial and Corporate Change 2008.
- Sirgy, M. Joseph. Ethics and Public Policy Implications of Research on Consumer Well-Being. Journal of Public Policy & Marketing (2008). 27:2, 207-212
- Sirgy, M.J. “Self-concept in Consumer Behaviour: A critical Review.” Journal of consumer Behaviour (2006): 550-562.
- Slocum, J.W., Jr. Mathews, H.L. “Social Class and Income as indicators of Consumer Credit Behaviour.” American Marketing Association 34 (1970): pp.611.
- Subal C. Kumbhakar, Christopher F. Parmeter. The effects of match uncertainty and bargaining on labor market outcomes: evidence from firm and worker specific estimates. Journal of Productivity Analysis 2008.
Appendix
Table 1.indicating he number of respondents who chose a variable out of 100.