The Role of Family in Hispanic American Financial Planning

More than half of Americans are living paycheck to paycheck and household debt has risen to $12.68 trillion in 2017, a peak that has not occurred since the Great Recession of 2008.  According to Northwestern Mutual, fifty-eight percent of Americans believe their financial-planning efforts need improvement.  Record high credit card and student loan debt combined with lack of savings for emergencies and retirements (The Federal Reserve, 2017) have necessitated a need for a better understanding of financial planning. As financial planning falls under the domain of financial well-being, it is important for marketers in wealth management to conduct research about consumer choice in such areas as insurance preference and investment portfolios, among others.   

Thus far, research in financial planning has focused on an individual’s financial knowledge or financial literacy as the main antecedent to future-oriented financial planning.  In other words, prior research has mainly viewed whether or not a consumer makes a financial plan for their future (e.g., retirement, college education) as a function of how well they are informed about financial products.  Some research has also investigated the emotional aspects of consumers in their financial decision making or in their financial well-being and satisfaction. While one’s knowledge about financial products and one’s emotional status are important factors, these works have overlooked a person’s value system that might impact their future-oriented financial planning behavior.  Much of the planning toward future financial health in retirement, college education, and life insurance rests on how much one values their own immediate and extended family. Missing from the extant research is an investigation that captures cultural values as an antecedent to future-oriented financial planning. 

Investigating cultural values in financial behavior is particularly important in the United States. U.S. is a very diverse country with many ethnic groups. These ethnic groups are laden with diverse cultural values. One such group is Hispanic Americans.  Hispanic Americans are the largest and fastest growing ethnic group in the United States. From 2000 to 2010, Hispanic Americans had  a 43% increase in population, and are expected to grow 167% from 2010 to 2050. There is an urgent need for financial service managers to understand this ethnic group in their behavior as there are limited conclusive research findings other than that they are reported to behave differently than non-Hispanic groups.  There is a lack of research that investigates the causes of  WHY this group act differently than non-Hispanic consumers in the U.S, particularly  when it comes to their choices of financial services. 

One of the most distinguishing aforementioned features of Hispanic culture is its collectivist and family-centric cultural value, known as familism.  Familism is the most important value in the Hispanic culture when compared to other cultural values. Because of this cultural value, many Hispanic Americans have extensive strong family ties and multigenerational relationships.  As a result, financial matters are often viewed as family matters that are influenced and supported by parents, grandparents, and relatives. We therefore suggest that it is appropriate to investigate familism as an important factor in Hispanic consumers’ financial planning. Consider the following questions:

1. What are your thoughts on this topic?

2. Are there other cultural values that could have an influence?

3. Can you relate to this topic?

4. What are some managerial implications of this suggestion to incorporate familism when trying to understand/influence Hispanic American financial planning behavior?

“You are what you eat”

Suppose a consumer who is allergic to dairy products is shopping for a non-dairy yogurt.  After browsing through a variety of brands, she sees the product “O’Soy," with a product label claim identifying the product as “organic soy yogurt.” Is it safe for the food allergic consumer to rely on this information, purchase and then consume this product?

            This is a serious question faced by many food allergic consumers today and the answer is not as simple as one would presume.  The “O’Soy” brand name appears to indicate this is a soy based yogurt.  In addition to the brand name itself, a prominent product label claim in large bold font on the front label, identifies the product as "Organic Soy Yogurt." A recent research study has suggested that food consumers are influenced by and base their purchase decisions  on the name of the food product (Irmak, Vallen, & Rosen Robinson, 2011).  Additionally, prior research has substantiated the notion that food allergic consumers utilize package information and product claims to evaluate if a product contains an allergenic substance (Voordouw et al., 2012). 

            If the above food allergic consumer assesses allergen risk in a similar fashion, this is but one example of how a food allergic consumer may unknowingly consume an allergenic substance, since an inspection of the back label of the “O’Soy” yogurt states that the product does in fact "contains milk."  This potential mistake, relying on the package information found on the front of the yogurt container's label, could be life threatening to a food allergic consumer allergic to dairy products.   Further investigation revealed an online disclosure, found on the "O'Soy" website that states  "O’Soy is lactose free and that those who are only lactose intolerant, and not allergic to milk, can safely enjoy O’Soy" (Stony Field Farm, 2011).   In 2014, Stonyfield Farms modified the ingredients and cultures used in O'Soy yogurt in order to eliminate dairy in the yogurt.

            As the previous example illustrates, more understanding and research is needed on this issue, since confusing and often conflicting product ingredient information appears on food product labeling. Domestically and internationally, food allergies have become exceedingly prevalent in children, adolescents and adults (American Academy of Allergy, 2011). Both the United States and various European governments recognize the importance of clear and complete ingredient communications of known allergens to allergic consumers and have instituted various labeling and allergen disclosure laws such as the United States’ Food Allergen Labeling and Consumer Protection Act (FALCPA) and legislation improvements like those found in the EU's Food Information for Consumers Regulation (Agency, 2014; Services, 2006). 

            Regardless of legislative mandates, manufacturers should institute clear labeling if the product(s) place consumers at risk for harm. Yet, despite the ethical benefits and legislative mandates designed to assist the food allergic consumer, food allergy labeling still remains unclear and there is no clear consensus on the best manner to convey allergen information to the food allergic stakeholder, and as noted in the prior example, there have been examples of conflicting (incongruent) allergen information communicated to the allergic consumer via the product information and packaging material. 

            This domain of food allergic consumers, current labeling issues and their decision making processes is an under-researched and newly emerging issue that needs to be addressed so as to provide a safer and more consumer friendly food shopping experience for allergic consumers and stakeholders of food allergic individuals.
Do you agree?  Have you had any experiences similar to the example shared above?  What are your thoughts to improve the labeling on food?

*This blog is based on a doctoral dissertation by Roger Wortman entitled ‘Impact of Product Label Claims.' His committee consists of Dr. Suri Weisfeld-Spolter (chair), Dr. John Stanton (reader), Dr. Cindy Ruppel (methodologist) and Dr. Herb Brotspies (4th member).

Image Source: Speech Buddies, Inc., 2017

Sara Weisfeld-Spolter, Ph.D., Associate Professor of Marketing, H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. Dr. Weisfeld-Spolter can be reached at sw887@nova.edu

Does the Salesperson have the Midas Touch?

The rate of evolution and diffusion of technology has created new means for consumers to search for product information and gain increased knowledge before an actual purchase. The additional channels available for product search and purchase leads to the use of multiple channels by consumers, thereby changing the consumer’s purchase behavior. Consumers now approach the purchase process as multichannel consumers (MCCs), resulting in changes to the retail-selling environment. In this relatively new “click and brick” MCC-shopping environment, the role of the in-store salesperson is being questioned.

 Given this new landscape of retailing in which certain MCCs seemingly have more knowledge than the salesperson (Verbeke et al., 2010), it is unknown how or if the in-store salesperson can be used to increase MCCs’ purchase behaviors. Recent research proposes conflicting roles of the salesperson with the implication that the salesperson is obsolete (Grewal et al., 2002), suggestions that the salesperson has been transformed to a knowledge broker (Bendixen, Yurova, Abratt, and Rawdan, 2014), and yet other scholars contrast this by claiming technology cannot replace the unique functions of the salesperson (Ahearne & Rapp, 2010).  It appears a gap of agreement, understanding, and knowledge exists regarding what role, if any, the in-store salesperson has in the new shopping environment.

Similar to the story in Greek mythology whereby everything King Midas touched turned to gold, we consider if the salesperson has the “Midas touch” by using adaptive selling as a tool to lead the MCC to purchase.  We maintain that adaptive selling, if done correctly, can play a pivotal role in persuading MCCs to purchase in-store.  In fact, we did a study of 400 MCC’s and found that salespeople who are able to adapt the sales presentation to the MCCs’ needs are more effective in influencing purchase intention than those who present the same information to all buyers. Overall, the results confirm the ability of adaptive selling to be utilized as a technique in persuading a multichannel consumer to purchase in the retail store and add support to the notion that the salesperson is not obsolete, but rather can be very influential in persuading MCC’s to purchase at the retail store.  Our findings represent an opportunity for companies to encourage multichannel searching for their products across channels while simultaneously training retail salespeople in adaptive selling techniques, so that they can have the Midas touch when selling to MCC’s at the retail store.
Do you agree with our findings? Do you find salespeople to be knowledgeable and helpful? Do you use your phone for information rather than ask a salesperson for help?

Image source: walyou.com, 2016.

Sara Weisfeld-Spolter, Ph.D., Associate Professor of Marketing, H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. Dr. Weisfeld-Spolter can be reached at sw887@nova.edu

Understanding College Student Satisfaction*

Colleges and universities are facing greater competition for students and other resources from a variety of areas, and one of the responses to this increased competition has been a greater appreciation of marketing concepts by colleges and universities, with a special focus on customer satisfaction. Many of us are familiar with some of the benefits of satisfied customers, including repeat purchases, higher spending, positive word of mouth and customer loyalty.  Similarly, in the educational setting, satisfied students should be more likely to remain at the institution and help increase retention rates and may also equate to students being more inspired and motivated to more actively participate in the educational process. While there has been some debate as to whether students are in fact the customers of higher education, given that students make a variety of consumerist decisions in the higher education setting, researchers have generally concluded that students are in fact customers. Students also often perceive themselves as ‘customers’ of higher education, and in marketing, we know that perception is reality. Assuming that students are in fact customers of higher education, it is important to better understand their role in the university setting and examine how this affects their overall satisfaction. We will do this by extending key service and marketing concepts that relate to regular customer satisfaction in a retail or service purchase and apply them to the higher education context.

It has been suggested that in higher education, students’ active participation is required for success. Meaning, it is not enough for them to simply ‘show up to class.’  In the retail and service environment, the result of co-participation of the customer and organization in the production process is referred to as co-production.   In a college setting, co-production occurs when students become partners in the educational experience. They may participate in a variety of areas including curriculum development, teaching a class, conducting research with a professor or mentoring other students.  Co-producing activities often lead to feelings of involvement, which is usually a good thing in marketing.  On the other hand, students' active roles in the educational process can also lead some students to feelings of entitlement, leading some students to expect special treatment, and think that they are special and deserve certain things.  Many a professor, including the author of this blog can provide tales of student’s requesting higher grades because of the time and effort they have put in or because of the consequences of lower grades.  If we view today’s college students as customers that are co-producing in the education process, it is reasonable to expect that this may result in feelings of entitlement which in turn, may affect their satisfaction. 

Understanding the relationship between co-production, entitlement, and satisfaction can help to provide guidance to relevant college and university stakeholders. For example, many colleges and universities currently offer new student orientation programs.  Care should be taken to make sure that the orientation programs place emphasis on the student’s role in the co-production process and sets clear expectations.  Colleges and universities should also offer training to those individuals participating in the educational process (i.e., instructors, support staff) to better understand the role of the student.

What do you think? Does the link between co-production, entitlement and satisfaction seem reasonable?  What other factors could affect student satisfaction?  Is student entitlement a good thing or bad thing? How do you feel about students co-producing?  What else can colleges and universities do to facilitate customer satisfaction in a way that preserves the integrity of the institution?

*This blog is based on a doctoral dissertation by Deborah Sisson entitled ‘Role of student entitlement and co-production on satisfaction.’ Her committee consists of Dr. Suri Weisfeld-Spolter (chair), Dr. John Riggs (reader) and Dr. Yuliya Yurova (methodologist).

Student Satisfaction Survey (Developed by Clayton State University).

Sara Weisfeld-Spolter, Ph.D., Associate Professor of Marketing, H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. Dr. Weisfield-Spolter can be reached at sw887@nova.edu; http://www.business.nova.edu/faculty.cfm/sw887

A new name has cropped up on holiday shopping lists: Me!

Even with the challenges of today’s lagging economy, recent research suggests that consumers are spending more than $500 billion in gifts, with gifting representing 10% of the total retail market and self-gifting projected to be the highest yet with participation from 59% of shoppers. Gift giving occurs in all societies and is a social exchange process involving a giver and a receiver.  There are now many instances, especially in the United States where the giver and receiver of the gift are the same person (self-gift).

Self-Gifts are defined as 1) personally symbolic self-communication through (2) special indulgences that tend to be (3) premeditated and (4) highly context bound.  This definition helps to differentiate self-gifts from other personal acquisitions.  Self-gifts are a means to communicate with one’s self and, in particular, to influence one’s self-definition and self-esteem.  There is also an aspect of specialness to self-gifting, referring to the notion that self-gifts often have special meanings for consumers as compared to common, every day, self-directed purchases.  They can be any product, but they constitute a form of indulgence, making them different from a regular personal acquisition.  Self-gifts also tend to be premeditated and are typically not spontaneous purchases. They tend to be done to reward oneself after a great accomplishment or to cheer oneself up after a disappointment, but can also occur under other contexts such as birthdays, anniversaries and holidays.

Many companies are now capitalizing on our self-gift propensities in their promotions and advertising messages. For example, J.Crew recently created a "Gift yourself" section on its website, along with the text “To: you, From: you.”  The diamond industry has also caught onto the new “me” mood, with slogans like “Your left hand says ‘we,’ you’re right hand says ‘me’,” urging women to buy diamonds for themselves.  And slogans such as "You deserve a break today” (McDonald’s) and “The perfect little thank-me” (Andes candies) present indulgences as personal rewards.

Do you think this is an effective approach?

Do you engage in Self-Gift behavior?

When was the last time you bought yourself a special gift?

What did you buy?

Can you think of other companies that use self-gifting appeals in their messages?

P.S. To read more on the social-phenomenon of “gift-giving” visit the following article titled “Impact of Giving on Self and Impact of Self on Giving” by Dr. Suri Weisfeld-Spolter and colleagues Dr. Cindy B. Rippe and Dr. Stephen Gould: http://onlinelibrary.wiley.com/doi/10.1002/mar.20760/abstract

Suri Weisfeld-Spolter, Ph.D., is Associate Professor of Marketing and Chair of Doctoral Programs in the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at sw887@nova.edu

Are Multichannel Consumers Around the World Similar?

The advent of the Internet has spurred a technological evolution that is transforming retail worldwide through rapidly emerging channels.  Social media, mobile devices with location-based applications and reality-based technologies create a “showroom without walls” that distorts traditional distinctions between online and offline channels.  One of the responses to this technological innovation has been a global proliferation of the multichannel consumer (MCC), a more knowledgeable consumer who gains information about the product by surfing and switching between channels such as brick and mortar stores, Websites, mobile devices and other emerging shopping outlets.  Recent research has suggested that more than eighty percent of United States consumers research online before they buy a product in a retail store and it has been reported that seventy-eight percent use two or more channels to research an item before making a purchase.  This type of consumer, who shops in more than one channel including brick and mortar stores, catalogs, Websites, or any other emerging channel, has been labeled the multichannel consumer (MCC).   MCCs are not limited to the United States, and in fact, have been studied as a growing global phenomenon with a recent survey comparing responses from over 11,000 MCCs from 11 different countries (Pwc, 2012).  However, it is still uncertain if MCCs are part of a converging or diverging global consumer culture. 

Specifically, it is unclear if MCCs across nations are converging in perceptions and sharing a uniformity in consumer experiences and purchase decisions, or if MCCs are diverging whereby national cultures cause a dissimilarity.  On the one hand, we know that culture affects consumer behavior and cultural biases influence the consumer purchasing evaluation process.  On the other hand, proponents for a convergent global consumer culture report that the diffusion of technology, especially the Internet creates a more homogenous environment.  Likewise, it is a diffusion of technology and the Internet that has surged the MCC.

What do you think?

Do you consider yourself to be a MCC?

Are MCC’s homogenous (similar) around the world or does their culture affect what they value?

Do they make purchase decisions in the same manner? 

Are salespeople influential in their decision making?

Would it be a mistake for marketers to treat them in the same manner?

What other factors may need to be taken into consideration?

[*This blog is based on a research paper co-authored by Suri Weisfeld-Spolter, PhD; Yuliya Yurova, PhD;  and Cindy Rippe, DBA, currently under review at International Marketing Review]

Suri Weisfeld-Spolter, Ph.D., is Associate Professor of Marketing and Chair of Doctoral Programs in the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at sw887@nova.edu

Types of Electronic Word-of-Mouth (eWOM)

 

Electronic Word-of-Mouth (eWOM) is a rapidly growing, quickly evolving and increasingly important extension of traditional face-to-face word-of-mouth (WOM) in the marketing and consumer environment, and most recently, a very important outcome of activity on social media. Indeed, social media have greatly changed the way in which firms and their constituents are able to communicate electronically, extending the possibilities of eWOM from the traditional one-to-many and one-to-one marketing communications, to the new many-to-many and many-to-one communications.

Social network sites in their essence are built on eWOM in various forms and guises.  While much literature has addressed some of the different types of eWOM and their differences, there has not been a consolidated conceptualization of such differences. We suggest a concise typology of eWOM communications based on the level of user interactivity and participation, and thus locate these forms in a 2 (communication: collective, individual) x 2 (C2C interactivity: low, high) framework below. Four distinct categories of eWOM emerge from our framework: many-to-one, one-to-many, many-to-many, and one-to-one.

Many-to-one eWOM (e.g., the number of votes) represents the trend or explicit preference of a crowd. One-to-many text-based eWOM (e.g., product reviews) is descriptive and requires the audience to use more cognitive effort to read the reviews.  Many-to-many eWOM (e.g., online discussion groups) is a high involvement activity in which consumers continuously participate in the communication process. Finally, dyad-based one-to-one eWOM (e.g., instant messaging) is mostly private and non-transparent communications. The typology of eWOM presented in our figure not only depicts how different eWOM types are generated but also reflects how these different types are processed by users.

What are your thoughts on our suggested framework of eWOM types?

Do you think they are equal in their degrees of persuasiveness on the users of these eWOM?

Which eWOM category do you use most?            

Suri Weisfeld-Spolter, Ph.D., is Associate Professor of Marketing and Chair of Doctoral Programs in the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at sw887@nova.edu

Hispanic Business Owners Struggle with Financial Planning

South Florida is a multicultural area with a strong, vibrant Hispanic community that is an essential part of our culture and economy. Florida has the 3rd largest Hispanic population in the United States. The success of Hispanic-owned businesses is vital to our community and our local and national economies. However, there is one significant challenge that could potentially impede the levels of growth and success for Hispanic entrepreneurs as revealed by research stemming from collaboration between DBS Financial Group and Nova Southeastern University.

Results of the survey showed that in general they lacked in-depth understanding of financial products and services. Findings revealed challenges in 6 key areas where effective financial planning is extremely important for personal and business success and survival: family responsibility, levels of financial knowledge, retirement planning, achieving long-term goals, generational differences, and succession planning.

Major findings of the study included the following:

1. 80% of these business owners are financially responsible for dependents including children, parents, and other family members.

2. 51% have family members other than children who rely on them for financial support.

3. 43% have both children and family who depend on them for financial support.

4. Those with business revenues below $500, 000 were less knowledgeable than those with revenues above $500, 000 for both businesses and families.

5. All respondents shared that they do not believe that they are doing a good enough job preparing for retirement.

6. Business owners had achieving their long-term goal as top priority but were not sure of their ability to do so.

7. There is a relationship between the number of employees and business generation type. For example, 1st generation businesses have an average of 7 employees; 2nd generation, 6 employees; and 3rd generation, 19 employees.

8. 90% of the business owners surveyed expected to pass their business onto a family member.

Since financial knowledge is critical yet lacking, it is important to educate Hispanics about financial responsibility as this affects entrepreneurial success, local economic growth, and personal and family well-being. It is recommended that the Hispanic community actively seek opportunities available through business, academic, and professional organizations to learn more about financial planning.

Suri Weisfeld-Spolter, Ph.D., is Assistant Professor of Marketing and Acting Chair of Doctoral Programs at the H. Wayne Huizenga School of Business, Nova Southeastern University. She can be reached at 954-262-5192 or sw887@nova.edu Read More