INFLUENCE OF SOCIOECONOMIC STATUS ON CONSUMER BEHAVIOR

INTRODUCTION TO THE TOPIC

The success of the business depends on how well it is embraced by the target customers and for this, the entrepreneurs and the business manager needs to keep a close eye on every little aspect of the whole process to ensure no single point is missed to lead to success. The management attempts to develop an in depth understanding of its consumers, their attitudes, perception and the factors that could influence them to devise plans that are more effective for a particular market segment they are targeting. The consumer behavior must be well recognized before developing and launching new products or services to make sure the full potential from the innovation process could be achieved by providing the most effective products to the customers in most useful way. Consumer behavior is a whole field of study and it describes in detail about what customer feel, perceive and how he reacts in particular situations and under specific influences during their purchase decision making processes. This whole behavioral study blends the aspects of psychology, social anthropology and even economics to describe the customers both individually and even in groups. As the customer attitudes are influenced by numerous factors, the customer reaction or behavior is difficult to envisage. There are different tactics developed to deal with customers in an approach that is more personalized as per customers and is thus more customer oriented. There are multiple factors that influence the purchase decision making process at different levels of the cycle and these factors could be categorized as the psychological factors which include the customer perception, his beliefs, motivation behind purchase and even feelings while the other category is the personal factors of consumer behavior.

These factors which could influence the decision making of the customer could include the customer demographics like age, gender, lifestyle, occupation, economic status, personality etc. in addition to these two broad categories, some external factors could also influence this process of purchase and include the culture, peers, family, ethnicity, past experience, social class and other market factors. Of these many described influential factors for consumer behavior, socioeconomic status is an important aspect that determines the purchase patterns which could be observed in a particular area inhabited by individuals belong to a certain socioeconomic class. The socioeconomic status of an individual is a measure of two parameters as could be said from the name, his economic strength and the social position. This measure defines the work experience of a person and the social position he carries in the system where he lives, and these positions are based on the education, income and occupation of the person and this is definitely a relative measure of a persons status overall. If the social-economic status of a family has to be determined, it is dependent on the number of earners that family has got and the total household income. The education and occupational information of the individual member of the whole family collectively determine the position it holds in the community both socially and economically (NCES, 2008). There are three categories or classes generally in which families or individuals are divided in terms of the socioeconomic status (SES) and these are high, middle and low class. Commonly one or more of the variables (income, occupation, education and wealth) are determined when placing families or individuals in these classes.

The social class of the individual influences the lifestyle attitudes and the preferences in almost every aspect of life. The purchase decision is one of the most commonly described aspects that are influenced significantly by the socioeconomic status of the individuals involved in these decisions for their families or for themselves. What product or service they should buy when the need arise depends increasingly on the status of the individual and how they perceive it, most importantly. At times, individuals from lower or middle class are found to be more conscious about the brands as they under the increased societal pressure attempts to buy products that are not in their range or not suitable for the particular class. But there are again factors that lead to such purchases. Generally, the customers belonging to specific classes are found to behave in similar manner during their purchase decisions and brand selection. The consumer behavior is perceived to be socioeconomic class specific and the influence of the status of the individual within a society is a key driver of his shopping needs and demands. This is important for the entrepreneurs, managers and marketers to understand this relationship to develop products and service that suits these needs and preferences criteria of the population they are targeting. In this study, this important aspect would be observed on the population from a developing country to describe how the individuals perceive this influential factor and how they are influenced by the people above them, in terms of socioeconomic status.

REVIEW OF BACKGROUND LITERATURE

The consumer buying behavior treats the customer in three roles that are all discrete and important. The customer is the user, the buyer and the payer at the same time. For this diversification, the behavior of the customer is highly unpredictable and even the most expert of the field could not tell for sure how a customer would react under particular circumstances (Armstrong, 1991). There are different factors that influence the consumer behavior and of them, the other individuals influence is most important (Bearden Netemeyer, and Teel, 1989). The social influence on the consumer behavior has been described in many models of consumer decision making (Ajzen and Fishbein, 1980). In the life of an individual, at intervals, the person identified an unsatisfied need and information search is initiated to find the products or services that could satisfy this need. The information search involves both internal and external search sources (Belch and Belch, 2007) and of the different sources used in this process includes the personal sources, commercial sources, public sources and even past personal experiences. After the information is achieved and the available alternatives are considered to select the most suitable product or service to satisfy the individual need which is suitable to his status and lifestyle. After evaluation, the final decision is made by the individual that what product or service is best suited and he is going to have to fulfill his need. These purchase decisions, important even after the purchase has been made (Foxall, 2005) are influenced by multiple factors like lifestyle, demographics, ethnicity, reference groups and social class etc.

Development of consumer related knowledge, expertise and characteristics in individuals is known as consumer socialization (Moschis and Churchill, 1978) and the most popular theory to describe this phenomenon of socialization is the social learning model (Moschis and George, 1976). This theory describes that the socialization is actually a result of the environmental influences on the individual life (Bandura, 1969). The consumer socialization affects the purchase and consumption patterns of the individuals (Moschis and Smith, 1985) and also other aspects like economical and social motivations. An interesting finding comes from a study carried out in Turkey about the householder purchase. It showed that the economic deprivation had no effect on the urge of purchasing and showing off excellent home appliances like washing machines, dishwashers, etc (Simmel, 1991). SES The socioeconomic status is a concept to determine an individuals position in the society by determining measures like education, wealth, income and occupation. This status determination describes the resource accessed or controlled by the individuals and there are generally three classes described, low, middle and upper. These classes are even determinant of the health conditions (Micheal, 2004) and mental issues or instabilities individuals are likely to face (Goode, 1999). TO determine the most of the shopping class in the society where the business is dealing or planning to deal is important for the marketers and the most part of the society is made by lower middle and upper lower class (Ismail, 2011).

Future determination and planning and motivation to look for the bright sides (Halson and Baron, 1994) and deal with stressful conditions is more associated high class that afford to pay for products and services and contrary behaviors are observed in the middle and lower classes (Kohn, et al, 1990). How to determine the socioeconomic status of an individual varies with areas. In United Kingdom, The social status of an individual is determined through a sophisticated occupation coding system that classifies them on the basis of occupation and monthly income (Meier and Moy, 1999) and describes the well being on an individual. On the other side, in South Africa, most of the status determination and other parameters depending on the position of an individual in the society are determined though wealth (World Bank, 2002). The degree of urbanization of an individual, a family or a region is also another measure of determining the socioeconomic status (Higgs, 1991 and Boniaszczuk, 1992). The social class has been used in history to describe different classes among the society and this classification was varied in different regions (Higgs, 2002). In the present times the term has been largely replaced, particularly in the United States Bureau of the Census which rather using the previously used terminology for social class, socioeconomic status, is now more into using well being to describe the same positioning strategy. This well being is defined by the bureau (2002) as: Personal or household income is generally regarded as the single best measure of the degree to which people are "well off." But other factors also contribute to people's well-being. Extended measures of well-being gauge how people are faring at the household level. Included are possession of consumer durables, housing and neighborhood conditions, and the meeting of basic needs.

A trend of purchasing national brands was observed in both high and middle class indicating an urge in the lower income customers to satisfy their self concept and also to enhance the social status they hold by purchasing branded products (Sethurman and Cole, 1999). The buying attitudes are considerably different in the different socioeconomic classes where high class customers tend to purchase more brand products and have extensive shopping budgets in comparison to the lower and middle class customers (Murphy, 1978). Also the gender differences along with the social status are also worth noting. It has been reported that female customers are more prone to branded purchases from the higher class then the females from middle and lower class (Coe, 1971). As discussed above, the socioeconomic status of the individual affects the behavioral pattern and preferences and how they adopt to behave in the society is also dependant on their status. The implications of the class a person is belonging to are diverse and they also affect the purchase behaviors of the individuals. Customers are influenced in many ways by the social and economical segment of the society they belong to and they react differently from the members of the other class. This study would attempt to understand how these class differences leading to attitude attributes of the individuals produce different purchase patterns. Further, how, under the influence of the socioeconomic categorization, a customer perceives the brands and product value and money matters in the purchase decision making process.

RESEARCH QUESTIONS, OBJECTIVES AND CONTRIBUTION AIM OF THE STUDY

The socioeconomic status influence a consumers purchase decision and thus it affects the business strategies of the firms. The management must understand the class differences in the purchases and should develop and provide products and services to the customers according to their need and what is affordable to the particular socioeconomic class the business is targeting. Through this study, an attempt would be made to understand the influence of socioeconomic class on the product purchase and brand conscious attitudes of the consumers. The selected population would be assessed for their class specific behaviors in the product and service purchase decisions.

RESEARCH QUESTIONS
This study under consideration is planned to answer the following questions:

How the socioeconomic status of individual affects their purchase decisions? What are the different factors that influence the consumer behaviour among a social setting?

How different social classes perceive the branded products in different product classes during their shopping process?

The answers to these questions would be struggled find not only to devleop a more indepth understngn of the topic but also to increase the literature value of the subject.

Socioecnomic influnces are highly imporatnt in the developing countries scanario and an attempt would be made to produce some results of value in this situation.

RESEARCH OBEJCTIVES
For this proposed study, the objectives defined are as follows:

To understand how individuals and families belonign to differnt socioecnomic classes shop under the influence of the external and internal factors

To develop a clear understadning of the brand imrpotance and its affects on the population of developing countries

To detrmine how the social and ecnomical sttaus of the individual influnce their perceptions and selection criteria

CONTRIBUTION
According to the researcher perception, this under considertaion study would have great acdemic value. If approaved and carried out successfully, would not be a fine addition to the particualr subject literature but would also give an in depth understanding of how socioecnomic status influcnce the consuemr purchase decision making process in the devloping countries like Pakistan. The data collection, during the course of this research would help the resaercher to achive the goals of this study and also to look for some other aspects that might be missed in the palnning phase and those would be covered alongside. Whatever the results this study would bring, they would open new dimernsions for the other researcher to explore the topic further.

RESEARCH DESIGN METHODOLOGY, DATA COLLECTION AND ANALYSIS RESEARCH APPROACH

The research approach determines the path on which the researcher could walk to success. The approach determines the methodology selection and the data collection requirements. There are two commonly observed viewpoints of research approach, one id deductive and the other is inductive. DEDUCTIVE RESEARCH APPROACH: This research approach leads the researcher from the more general theories of the under study topic to a rather specific conclusion or statement. These conclusions are deduced from the broader theory, thus is the name of the approach, deductive. INDUCTIVE RESEARCH APPROACH: Opposing to the deductive approach, this research path leads the researcher to initiate with more specific facts to generate whole theory. This research approach begins with the identification of smaller facts and ends on a bigger canvas. Deductive approach is adopted for this particular study under consideration to develop and present a clear understanding of the topic. The general aspect of socioeconomic status and its influence on consumer purchase behavior is intended to study to deduce how consumer belonging to specific social and economical class behaves in markets.

RESEARCH METHODOLOGY

Based on the approach, either deductive or inductive, there are many methodologies available to the researcher. Selection of proper methodology is of utmost importance and there are many factors that influence this selection. The particular topic under study, data collection methodologies intended to adopt, and evaluation parameters would affect the methodology selection. There are many methodologies that are available for a researcher to select from and of the most adopted ones, experiments, case study, surveys, for this particular study, survey methodology is planned to be used. The consumer buying behaviors would be observed through use of surveys that would be questionnaire based.

DATA COLLECTION
The next step in research design, is the data collection, determination of the required data type, tools for data collection and presentation. This is the vital step as the validity of data collected and presented determine the value if the study. Data collection, based on the sources, could be categorized in two classes, discussed briefly below.

1. Primary Data: This type of data is collected directly from the source and tools for this type of data collection are interviews and surveys etc. 2. Secondary Data: This type of data is collected from the sources which have collected and used the information for some other purpose and the researcher uses it to establish the conclusion from his research perspective.

For this particular study, a combination of both data types would be collected, primary, as well as secondary. The primary data would be collected through a questionnaire

based survey on the under study population. This survey would determine how the customers from particular socioeconomic class describe their buying behaviors. An intended questionnaire that is planned to be used for this particular study is presented in Appendix I along with the reasons to add the question but it is subject to change according to research requirements and guidance. The other type of data is secondary that would be collected from the different organizational analysis about their sales as observed and reported on the under study population. This data would then be used to answer the research questions of the proposed study. The cross analysis pattern would be applied to each question in the section two and based on section one, class wise responses would be figured out.

SAMPLE SIZE
For the primary data collection, a total of one hundred responsive samples would be collected from the Pakistani population. These questionnaires would be paper based and handed over to the participants after their consent would be received.

LIMITATIONS OF THE RESEARCH

There are certain limitations that are identified so far in the planning phase of the research. Attempts would be made to deal with them well. A brief description of these limitations is given below.

DATA ACCESS: To collect the most accurate and adequate data would certainly be a challenge as the study is on the socioeconomic status of individuals and during a survey, the participants might intended to show that they belong to good class by

providing false information. This limitation would be attempted to overcome by ensuring the participants that the results would be dealt with confidentiality and no information would be shared with any irrelevant person.

TIME CONSTRAINT: The time would certainly be another important limitation as the data collection, management and calculation needs time to be managed adequately. Sufficient time would be attempted to be given to each research step.

REFERENCES
Ajzen, I, Fishbein, M, 1980, Understanding Attitudes and Predicting Social Behavior, Englewood Cliffs, Prentice Hall Armstrong, J, S, 1991, Prediction of Consumer Behavior by Experts and Novices, Journal of Consumer Research Inc, pp. 251-256 Bandura, 1969, The influence of consumer socialization variables on attitude toward advertising: A comparison of African-Americans and Caucasians, Journal of Advertising, Volume 28 Bearden, W, O, Netemeyer, R, G, Teel, J, E, 1989, Measurement, of consumer susceptibility to interpersonal influence, The Journal of Consumer Research, 15, 473 481 Belch, G, E, Belch, M, A, 2007, Advertising and Promotion; An Integral Marketing Communication Perspective 7th Ed. New York, McGraw Hill Boniaszczuk, J, 1988, Urban/rural Segmentation for Todays Marketer, Proceedings of
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the 10 SAMRA Convention, South African Marketing Association, Johannesburg Coe, B, D, 1971, Private versus national preference among lower and middle-income consumers, Journal of retailing, Vol.4, pp.61-72 Foxall, G, R, 1994, Consumer Initiators: Adaptors and Innovators Vol, 5, Issue, Supplement, pp. 3-12

Goode, E, 1999, For Good Health, it Helps to be Rich and Important, New York Times Halson, Baron, 1994, An Examination of the Pathways through Which Social Class Impacts Health Outcomes, Academy of Marketing Science Review Higgs, N, 2002, Measuring Socioeconomic Status: A discussion and comparison of methods or letting the gini out of the bottle plus some thoughts on well being, Research Survey Ltd. Higgs, N, T, 1991, Practical and Innovative Uses of Correspondence Analysis, The Statistician, 40 (2), Institute of Statisticians, London Ismail, Z, 2011, Buying Behavior: Gender and Socioeconomic Class Difference on Interpersonal Influence Susceptibility, International Journal of Business and Social Science, Vol 2, No, 4

Kohn, M, Naoi, A, Schoenbach, C, Schooler, C, Slomczynshi, K, 1990, "Position in the Class Structure and Psychological Functioning in the United States, Japan, and Poland", American Journal of Sociology 94: 964-1008 Meier, E, Moy, C, 1999, Social Classifications a new beginning or more of the same?, Journal of the Market Research Society, Vol 41, No 2, The Market Research Society, London Michael, M, 2004, The Status Syndrome: How Social Standing Affects Our Health and Longevity, New York, Owl Books

Moschis, Churchill, 1978, The influence of consumer socialization variables on attitude toward advertising: A comparison of African-Americans and Caucasians, Journal of Advertising, Volume 28 Moschis, George P, 1976, Social Comparison and Informational Group Influence, In Bearden, William, O, Netemeyer, R, Teel, J, 1989,Measurement of Consumer Susceptibility to Interpersonal Influence, Journal of Consumer Research 15 473-481 Moschis, Smith, 1985, The influence of consumer socialization variables on attitude toward advertising: A comparison of African-Americans and Caucasians, Journal of Advertising, Volume 28 Murphy, P, E, 1978, The effect of social class on brand and price consciousness for supermarket product Journal of retailing, Vol.54(2), pp. 33-42

National Center for Education Statistics, 2008 Sethuraman, R, Cole, C, 1999, Factors influencing the price premiums that consumers pay for national brands over store brands. Journal of product and brand management, Vol.8(4), pp. 340-351 Simmel, 1991, Symbolic Meanings of High and Low Impact Consumption in Different Cultures World Bank, 2002, Deninger and Squires dataset (1996) downloaded from Word Bank website www.worldbank.org

APPENDIX I QUESTIONNAIRE
This Questionnaire is a part of a research that is a part of a study program at (Kindly put University name). All the information you provide in this form would be kept strictly confidential and at no point, it would be shared with irrelevant persons. The data would be handled anonymously and thus the security of your information is secured. If you have any further concerns, you could openly ask the researcher. Thank you for your time and corporation.

Section I
This section would be added to assess the socioeconomic status of the participants. Before this section a consent would be added to ensure the participant concerns about the information they are providing to the researcher are satisfied.

1. Gender

Male

Female ---------years ______________ ____________ Rs. ____________ Rs. _______________

2. How many years you have been studying at any level? 3. Your current employment status? 4. What is your net Monthly Income? 5. What is you net Annual Income? 6. How many dependents you have?

Section II

1. I often consult my peers before purchasing from a particular product class? (This question is added to understand the role of peers on customers belonging from different classes)
Strongly Agree Agree No Comments Disagree Strongly disagree

2. It is important for me to show off the brands I purchase to my friends and how they would like it? (The purpose of this question is to assess how brand conscious are individuals based on the class)
Strongly Agree Agree No Comments Disagree Strongly disagree

3. I always attempt to purchase from brands that my friends and colleagues are buying from? (This question again was to assess the attitudes of the individuals about the brand products and purchase decisions)
Strongly Agree Agree No Comments Disagree Strongly disagree

4. I always try to purchase products of good brands regardless of the price and my budget? (This question is added to assess if the economic status of the customers affect their purchases)
Strongly Agree Agree No Comments Disagree Strongly disagree

5. I believe that the brand products are better and worth the price for the quality they deliver? (How customer purchase when cheap alternatives are available against an expensive brand in the different classes)
Strongly Agree Agree No Comments Disagree Strongly disagree

6. Price comparisons are important for me to make sure I purchase products of good quality within my budget? (To assess if the prices are important for customers and they take them a significant product attribute)
Strongly Agree Agree No Comments Disagree Strongly disagree

7. While purchasing products that are seen to others in my society I try to buy from brands that are expensive and have higher reputation?
Strongly Agree Agree No Comments Disagree Strongly disagree

8. For home appliances and other such products, I tend to purchase products from brands that my friends and family are using?
Strongly Agree Agree No Comments Disagree Strongly disagree

9. I believe branded fashion clothing is important as they are status symbol in the society?
Strongly Agree Agree No Comments Disagree Strongly disagree