Socioeconomic Status and Consumption in an Emerging Economy

Abstract

Despite the central role of social class or socioeconomic status on consumer behavior and the fact that this construct has been utilized in marketing research for more than seven decades, the marketing literature is surprisingly short on the conceptualization and measurement of this important construct. In this study, we address these issues and propose a flexible and robust theory-based framework for socioeconomic stratification, which we apply to identify socio-economic strata during a period (2003 and 2009) of substantial economic and social development in one emerging economy (Brazil). We then use this stratification to examine the relationship between socioeconomic status and consumption. Our socioeconomic stratification framework shows how the recent economic development observed in Brazil benefited the lower strata, leading to the emergence of the country’s “new middle class”. We also find that despite the high income concentration still prevailing in Brazil, consumption in many product categories is more evenly distributed, so that firms that follow a premium market positioning targeted mostly to the upper classes are ill-advised, because they leave a substantial portion of the market to the competition.