The impact of class mobility in SA

These findings were presented at the Gordon Institute of Business Science's (GIBS) marketing conference titled "Understanding the South African Consumer Markets and its Segments", held last week, Thursday 22 June 2006 in Illovo, Johannesburg.

During her presentation, "Class Mobility and the Changing South African Consumer Market", independent researcher Debbie Milne noted that South Africa is currently a class mobile society.

Shaping society

Many people, especially from the previously disadvantaged communities, "are now doing whatever it takes" to catch up with their 'white' counterparts in terms of financial and materialistic achievement. This has engendered the black middle-class or upper middle-class that can be seen nowadays driving flashy cars, joining multi-racial social clubs, relocating in the suburbs and addressing people in English as much as they can.

"While nearly half of our population (45%) believes they fall into the middle class, 31% say they are still in the lower/working class, 12% are in the upper middle class, and only 2% say they are in the upper class and 10% do not know or can't say," Milne said.

Unfortunately these beliefs and boastings that "I am now officially a member of the middle class, upper middle class or whatever class", can only be based on self-perception, as many people based their responses on their respective materialistic achievement, or if they have achieved any since the dawn of democracy.

Milne explained: "Class mobility is a self-classification and an important tool for self-projection. It also impacts on how a nation shapes its society and how people define themselves. In essence this is the only segmentation where the consumer self-segments. Although we are able to correlate perceived class with income and Living Standard Measures (LSM), we are able to see where consumers see themselves along the class continuum."

Nevertheless, people do not see themselves in the present - they see themselves where they want to be, and will often extend their budget to buy products that reflect this mindset, delegates were told - "What I believe is what I will be".

Education key

As the income gap continues to diminish between whites and blacks, this 'buying-buying' business has dramatically put peer pressure on the market. Delegates were told that the following items have taken off in a middle class household and are constantly in demand: microwave oven, hot running water, DVD player, washing machine, motor vehicle and VCR. Interestingly enough, TV sets, water in home, flush toilets, fridges/freezers, electric stoves, cellphones, hifis, and built-in kitchen sinks are just some of the items in which the lower class is now competing neck-to-neck with middle and upper class.

Education is also seen as one of the main drivers of class mobility. The implications for South African organisations are:

• Advertising is far more complex in a mobile society.
• Mobile people create risk-taking and want to succeed against all odds.
• The focus is now outward.
• Upwardly people enjoy advertising and are early adopters.
• Service in South Africa needs to step up a notch.
• Technology is a status symbol and a cause of anxiety.
• English is a status issue.
• Loyalty pays.
• Certain products will take off exponentially.
• Credit.

Milne warned: "Class mobility must not be used as the sole segmentation when marketing, rather as a tool to track mobility. It is a simple but wonderful model that makes mobility easy to track and to be predicted."

Mobility can also predict changes in the product and markets, product and media usage - cut-offs and changes, changes within broad geographic locations, political and social value changes, and change of values within a class are easy to track.

It has also been established that mobility - or growth of LSM group - is based on change in complex of factors contributing to living standards.

Milne has this advice for marketers:

• There is no room for comfort zones - strategising must be an ongoing process.
• Mobile people want to be noticed and 'fit in' with the right people. Owning and using high-status branded goods is symbolic with being rich.
• Advertisers must 'Aim High!' Tap into consumers' ambitions and perceptions of being class mobile.
• Opportunities in a changing South Africa abound and 'Mobile People' view this change as exciting.
• Marketers must enhance their communication with consumers through professionalism in service, products and delivery.
• Harness the massive numbers of highly desirable consumers in the working and middle class.

For more information, visit www.gibs.co.za/conferences/consumersegments, and www.futurefact.co.za.