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Department of Marketing
Ko de Ruyter, Professor and Chair, Marketing Department, Maastricht University
The Marketing-Finance Interface: A Relational Exchange Perspective
Department of Marketing
www.marketingsite.nl
No school for old men…
• During the past two decades strong focus on the marketing of services, specifically financial services
• Tracing back the origins of the MF interface; The Marketing-Finance: A Relational Exchange Perspective, Journal of Business Research (2000)
• Wall street vs. Main street• Marketing managers: Procedural Fairness (+)• Finance managers: Interfunctional Rivalry (-)• Both: Mutual Resource dependence• The Marketing-Finance Interface: A
Relational Exchange Perspective
Department of Marketing
www.marketingsite.nl
2004 New Kid on the Block:
• JBR paper A Marketing-Finance approach towards industrial channel contract relationships: a model and application
Department of Marketing
www.marketingsite.nl
We fast forward to 2008: Research on the Formation of Online Investors’ Self-Efficacy
Department of Marketing
www.marketingsite.nl
Current Trend
• Online consumers are active co-producers of financial services
• Not only trust the bank, but also trust themselves• Confidence or self-efficacy is based on increasing
variety of information sources• As a result self-efficacy updating is a dynamic
process• We suspect that different patterns will exist!
Department of Marketing
www.marketingsite.nl
Service Providers Educate Customers
• Bank of America: “tools and independent research to help you choose the right investments”
• Alex: Alex Academy
• ABN-AMRO: TradeGlobe Academy, TradeBox
Department of Marketing
www.marketingsite.nl
Managerial Problem: How can customers adapt to their new service role?
• Online investment induces self-defeating behaviors such as excessive trading because of overconfidence
• This is particularly problematic because: – customers tend to attribute service failures more
to the firm than to themselves, – share these bad experiences effortlessly with
online peers, – and can seamlessly switch to a competitor’s web
site
Department of Marketing
www.marketingsite.nl
Research Questions
• How can novice investors be successful online?
• Does investors’ self-efficacy matter?
• How is self-efficacy formed during pre-purchase information search?
Department of Marketing
www.marketingsite.nl
Research Design
• Computerized survey using online investment context
• Respondents were asked to invest a predetermined sum of money in stocks
• Respondents were asked to look at three websites; a firm, expert, and peer information source of which source evaluations and self-efficacy were recorded
Department of Marketing
www.marketingsite.nl
Research Findings
Highly efficacious consumers:
• achieve higher profits
• have higher usage intentions
• Perceive higher service value
Department of Marketing
www.marketingsite.nl
Research Findings
• Information source credibility and argument quality increase self-efficacy
• Consumers differentiate among information sources and weigh associated evaluations differently
• Focus on third-party credibility and firm argument quality. Surprisingly, peer source is less relevant.
Department of Marketing
www.marketingsite.nl
Research Findings
• Amount of search does not affect self-efficacy
• Consumers’ engagement impacts effect of source evaluations
Department of Marketing
www.marketingsite.nl
Research Findings
• Multiple investor segments exist based on response to information:
– Segment 1 (n = 89): increases self-efficacy during search
– Segment 2 (n = 146): maintains self-efficacy
– Segment 3 (n = 22): decreases self-efficacy
Department of Marketing
www.marketingsite.nl
Research Findings
• Increasing segment: inexperienced, spends high effort, obtains high profits (€ 61.27 after 2 months)
• Maintaining segment: experienced, little less effort, medium performance (€ 52.09)
• Decreasing segment: experienced, low effort, low performance (€ 1.29), less motivation than other groups
Department of Marketing
www.marketingsite.nl
Implications
• Control investors’ information search by partnering with and linking to credible external information providers
• Provide high quality information: authenticity, consistency, clarity of content and style, and an explicit and transparent service recovery strategy
• Increase customers’ engagement by incorporating interactive user forums, real-time updates, customizable home pages, and virtual agents
Department of Marketing
www.marketingsite.nl
Implications
• Inexperienced investors make up for lack of experience by spending high effort
• This strategy pays off for novices compared to experienced investors
• A minority of investors is unmotivated and performs poorly
Department of Marketing
www.marketingsite.nl
Implications: What to do with underperforming customers?
• Convince customers that spending high effort on information evaluation and investment decision pays off
• Set realistic service expectations; customer makes own success
• Make information easy to digest; summary section with necessary info, click-through to details
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