Department of Marketing Ko de Ruyter, Professor and Chair, Marketing Department, Maastricht University The Marketing-Finance Interface: A Relational Exchange

Department of Marketing

Ko de Ruyter, Professor and Chair, Marketing Department, Maastricht University

The Marketing-Finance Interface: A Relational Exchange Perspective


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



2004 New Kid on the Block:

• JBR paper A Marketing-Finance approach towards industrial channel contract relationships: a model and application



We fast forward to 2008: Research on the Formation of Online Investors’ Self-Efficacy



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!



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



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



Research Questions

• How can novice investors be successful online?

• Does investors’ self-efficacy matter?

• How is self-efficacy formed during pre-purchase information search?



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



Example: Third-Party Web Site



Research Findings

Highly efficacious consumers:

• achieve higher profits

• have higher usage intentions

• Perceive higher service value



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.



Research Findings

• Amount of search does not affect self-efficacy

• Consumers’ engagement impacts effect of source evaluations



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



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



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



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



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

Documents

Department of Marketing Ko de Ruyter, Professor and Chair, Marketing Department, Maastricht University The Marketing-Finance Interface: A Relational Exchange