Diverse Markets

“When Cultures Collide”

Thanks to Rod Rothwell – an Aussie doing business in Korea – for bringing this to our attention.

According to  “When Cultures Collide“ by British linguist Richard D. Lewis,who has mapped out leadership styles and cultural identities, cultures have different approaches to communication in business negotiations.

Lewis speaks ten languages, so he realistically warns of the danger of cultural comparisons and generalizations. However, he finds that there are also “national norms:”

By focusing on the cultural roots of national behavior, both in society and business, we can foresee and calculate with a surprising degree of accuracy how others will react to our plans for them, and we can make certain assumptions as to how they will approach us. A working knowledge of the basic traits of other cultures (as well as our own) will minimize unpleasant surprises (culture shock), give us insights in advance, and enable us to interact successfully with nationalities with whom we previously had difficulty.

Lewis’ communication diagrams follow these conventions:

  • Wider shapes show greater conversational range
  • Obstacles are marked in gray
  • Cultural traits are also noted.

Vive la Différence!

How do the different nationalities compare? Here’s how they tend to communicate:

  • Americans tend to launch straight into negotiations, respond to discord confrontationally, and resolve with one or both sides making concessions.
  • Canadians, while similarly direct, can be more low-key, and inclined to seek harmony.
  • English may avoid confrontation in an understated, mannered, and humorous style
  • French often engage vigorously in a logical debate.
  • Germans rely on logic, while amassing more evidence and laboring their points more than the British or French.
  • Spanish and Italians “regard their languages as instruments of eloquence and they will go up and down the scale at will, pulling out every stop if need be to achieve greater expressiveness.”
  • Scandinavians can have entrenched but often reasonable opinions formulated “in the long dark nights.”
  • Swiss tend to be straightforward and unaggressive negotiators, obtaining concessions by expressing confidence in the quality and value of their goods and services.
  • Hungarians value eloquence over logic and are unafraid to talk over each other.
  • Bulgarians may take a circuitous approach to negotiations before seeking a mutually beneficial resolution, which will often be screwed up by bureaucracy.
  • Poles often have a communication style that is “enigmatic, ranging from a matter-of-fact pragmatic style to a wordy, sentimental, romantic approach to any given subject.”
  • Dutch are focused on facts and figures but “are also great talkers and rarely make final decisions without a long ‘Dutch’ debate, sometimes approaching the danger zone of overanalysis.”
  • Chinese tend to be more direct than the Japanese and some other East Asians; however, meetings are principally for information gathering, with the real decisions made elsewhere.
  • Hong Kongers negotiate much more briskly to achieve quick results.
  • Indians speak English in a way that “excels in ambiguity, and such things as truth and appearances are often subject to negotiation.”
  • Australians tend to have a loose and frank conversational style.
  • Singaporeans generally take time to build a relationship, after which they can be shrewd negotiators.
  • Koreans tend to be energetic conversationalists who seek to close deals quickly, occasionally stretching the truth.
  • Indonesians tend to be very deferential conversationalists, sometimes to the point of ambiguity.
  • Israelis tend to proceed logically on most issues but emotionally on some.


communication styles





Crying Over Spilled Milk

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Women Gone Missing

There was style. Governor Romney is generally judged to have won on performance. President Obama was said to not really showed up. But it was substance that in fact took the night off.  Among the innumerable topics either glossed over, grossly distorted or outright ignored were, for instance, the vital economic issues that affect American women.  Bryce Covert of the Nation writes that Women Went Missing in Last Night’s Presidential Debate:

Twice as many women over the age of 65 live in poverty as compared to men. Social Security is basically the only source of income for about a third of women over the age of 65, compared to less than a quarter of men. Without it, half of female beneficiaries would live in poverty. Same story with Medicare: the majority of beneficiaries are women.

Romney talked up his plan to overturn the Affordable Care Act as fast as he can. That includes the mandate that insurance cover contraception as a preventative care service without a co-pay, a provision that Ryan has said his team would undo on “day one.” That means women will go back to shelling out nearly $12,000 over their lifetimes for hormonal birth control. But the ACA also undoes gender rating, saving women $1 billion a year in paying more for the same services. Obama could have easily brought up either to demonstrate how anti-woman the pledge to repeal the ACA really is. He could have also mentioned the first bill he signed into law, the Lilly Ledbetter Act, which Romney has struggled with.

Immigration Reform

As I wrote in my article, Immigration Reform Would Create Millions of Jobs and Revitalize the Economy, the US needs the labor and purchasing power of productive immigrants. They are a leading driver of entrepreneurship and a major job creator. In a debate that was supposedly about domestic economics, how did this not come up?

Healthcare Reform

There was no substantive discussion of what’s really at stake in reversing the ACA, and debunking the myths about the ACA including which economic interests are behind the agenda to repeal it. There was no detailed analysis of the drivers of healthcare costs and how either candidate would begin to address those cost drivers.

Housing Issues

Jed Kolko, chief economist for the real estate analysis firm Trulia, expressed surprise that the housing crisis wasn’t mentioned considering about 31% of Americans with a home loan owe more on their mortgage than their home is worth. He concludes that housing isn’t a winning issue for either candidate:

For Obama to score points on housing, he would have to point to clear policy victories, which is a challenge for him. Romney would have to point to fresh ideas, which is also a challenge.

The List Goes On and On

Social programs, deficit deduction, tax policies, energy policy – you name it – no substantive discussion, if any at all was heard, just empty, and falsifiable rhetoric. Regarding tax policy, beyond what Factcheck.org called Romney’s “impossible tax promise,” no realistic alternatives or substantive measures were outlined, discussed and scrutinized.

Where’s the Beef?

If you noticed that through all the zingers and distortions, few real facts ever got mentioned, and what was passed off as fact was in fact vapid political rhetoric, you’re not alone. There’s a growing body of commentary beginning to point this out. Of course, you won’t get it from either the mainstream corporate media or the partisan media enterprises. You have to rely on outlyers to get a whiff of the lack of will to really democratize economics. As I wrote here, sadly, it took the perspective of someone as far outside the mainstream as you can get, socialist Marc Luzietti to call this out:

‎”Tonight a pair of actors will recite rehearsed talking points to prearranged questions. They will be judged on the quality of their ability to remember scripted answers and act appropriately.

Sadly, some people think this is important.”

China Has a 5-Year Plan

China has released its 12th Five-Year Plan for National Strategic Emerging Industries. Yet, a polarized U.S. political system can’t even get its two political parties to get past vapid rhetorical zingers, misrepresentations and spin and agree on some way to put their heads together and come up with a working plan to put the U.S. economy on a competitive footing.

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Advertising Slogans Lost in Translation

from American Demographics

Here’s why it’s not about translation, but trans-adaption.

Braniff slogan: “Fly in leather.”
Spanish translation: “Fly nude.”

Purdue slogan: “It takes a tough man to make a tender chicken.”
Spanish: “It takes a horny guy to make a chicken hot.”

Pepsi’s slogan: “Pepsi Brings You Back to Life.”
Chinese: “Pepsi Brings Your Ancestors Back from the Grave.”

Coca-Cola: the name Coca-Cola
Chinese characters: “Bite the wax tadpole.”
(later changed to characters that mean “Happiness in the mouth.”)

Clairol: “Mist Stick” curling iron
German: Shit stick (mist is slang for manure.)

Snap! Principle of Multicultural Marketing:

It’s not about translation. It’s about trans-adaption.

Acculturation Model

The U.S. Hispanic Market

Tony Malaghan, CEO of Arial International in University Place, Washington (info@arialinternational.com)  points out the importance of the U.S. Hispanic market:

Huge: Hispanic population is projected to nearly triple, from 46.7 million to 132.8 million from 2008 to 2050. In other words:

  • The U.S. Hispanic population share will double, from 15% to 30%.
  • Thus, nearly one in three U.S. residents would be Hispanic.

Diverse: U.S. Hispanics come from more than 22 different countries and, although there are cultural similarities between the sub-groups, there are also differences in attitudes and behaviors that marketers  need to acknowledge to best serve the interests of these consumers.

Language Use Differences: The use of Spanish is of course an obvious difference between the U.S. Hispanic market and the mass market. However, the use of Spanish vs. English varies within the Hispanic markets. Some Hispanics  only speak Spanish; others choose to speak Spanish over English; others prefer English; and others almost exclusively speak English.

Cultural Differences: An important element often overlooked with respect to the U.S. Hispanic market is the differences that exist between the sub-groups that comprise this segment of the market. These differences include country of origin, differences in Spanish use and dialect spoken, differences in food, music, holidays celebrated, etc.

Acculturation Differences: The process of acculturation has a major impace on these market segments.

A Multidimensional Process

Malaghan cites a 2004 dissertation by Cecilia Alvarez from Florida International University titled The Acculturation of Middle Income Hispanic Households  in which she notes that acculturation is a multidimensional process. Individuals change along various dimensions of social functioning. Alvarez defines consumer acculturation as:

A dynamic selective process generated by the contact of a consumer with a different consumer cultural orientation via acculturation agents or facilitators, through which the consumer adapts to the new culture. This adaptation is expected to be reflected in the consumers’ behavior, affect and values.

Acculturation generates changes in three levels of functioning:

  • Behavioral - includes behaviors like language use, customs, food consumption.
  • Affective - includes emotions that have cultural connections; for example, the individuals’ feelings towards their country of origin or towards the U.S.
  • Cognitive - includes individuals’ belief systems and fundamental values

So, how does acculturation affect consumer behavior and the approach to targeting and servicing this segment of the market? Let’s look at the 3 levels of acculturation.

Why Acculturation Matters

  • Past generations of immigrants had their children leave old world customs behind for the process of assimilation.
  • Acculturation is the process of incorporating or acquire a new culture without foregoing another one.
  • Hispanics do not “assimilate”, they “acculturate” without letting go of customs and/or language

3 Levels of Acculturation

Hispanic Market Segmentation

The three segments by Acculturation Levels are:

  • Non-Acculturated: Persons that only navigate within the Latino culture. Most of them have recently immigrated to the U.S. and prefer to speak Spanish
  • Acculturated: Persons born in the U.S. of Hispanic descent. They prefer to speak English and can navigate into the Latino culture
  • Semi-Acculturated: People that can navigate in both cultures.

How fast will the market acculturate?

The speed at which this will take place depends on these three major factors:

  • Time: the longer they live in the US, the longer they are exposed to a new culture and are able to incorporate it into their everyday lives.
  • Education: the higher their education level, the easier the understanding of another culture will be.
  • Socio economic status in country of origin: the higher the socio economic status they enjoyed in their country of origin, the higher the likelihood that they have been exposed to other cultures, thus enabling a faster and smoother transition

A Rapidly Evolving Market

Hispanic Market Segments Size

Situational Acculturation: It is important to bear in mind that acculturation can also be “situational.” Companies truly interested in segmenting the Hispanic market can further defining the situational acculturation levels of their consumers. Some people can be considered unnaculturated/bilingual/acculturated 100% of the time while others can go through these different states throughout the day.

For instance, a person can be fully acculturated at work where he or she behaves and consumes products very much in line with the general population, but at home speak Spanish. Yet he may watch both Hispanic and English-speaking television and consume non Hispanic products.

Suburban Hispanics: A Consumer Dynamics study from Acxiom Corporation shows that the Hispanic segments are changing rapidly. For one thing, the rapid expansion of Hispanics into American suburbs presents opportunities for marketers who can better understand the rich cultural diversity and purchasing attitudes of this segment.  The study reveals:

  • Hispanic suburban expansion is projected to continue.
  • The Hispanic market encompasses four distinct Hispburbanite groups.
  • Marketers have above average growth opportunities in areas with high concentrations of Hispanics.
  • Marketers should segment this culturally diverse group for maximum marketing impact.

Generational Factors: Hispanic Millennials bring a new set of characteristics to the mix. Since Latinos will account for more than 80% of the growth in the population of 18- to 29-year-olds over the next few years, they are now a key demographic for marketers, who will need to take into account the rapid changes under way in the composition and characterstics of the population of the Hispanic youth.

  • English Language TV Preference: Since they are for the most part are now the children, grandchildren or even great-grandchildren and beyond of Latino immigrants, 73% of 18- to 29-year-old Latinos watched English-only television or a combination of English and Spanish language television in the past seven days, and only 4% watched Spanish-language television alone.
  • Highly Connected: Hispanic millennials are nearly 66% more likely to connect via mobile than non-Hispanic Caucasians, and nearly twice as likely to own a tablet such as an iPad. They are just as likely as other millennials to be heavy Facebook users but almost twice as likely to use YouTube.
  • English Language Reading and Online Preference: When Millennial Latinos read magazines or visit websites, English predominates. They are more likely to read English-language magazines alone then they are to look into a combination of English and Spanish magazines (28% vs. 21%). Online, 18- to 29-year-old Latinos are even more likely to choose to visit English-language websites alone rather than both English- and Spanish-language sites (38% vs. 25%).
  • Close Cultural Ties: Still, Hispanic millennials maintain close ties with their cultural heritage. The Pew Hispanic found that among the U.S.-born children of Hispanic immigrants, country of origin is still important. Hispanic millennials are also more likely to still be living in their parents’ home due to the economy and delayed marriage and children trends, as well as the fact that Latinos in general are the most likely to live in multi-generation homes.

Marketers targeting Hispanics therefore need to develop complex and sophisticate marketing strategies to reach this very complex market.

Marketing and Service Implications

Essentially, the more exposed Hispanics are to behavior and beliefs of the host country, the more similar they become in consumption patterns of the mass market. However, Alvarez reminds us that acculturation can be bilinear, which means that a segment of the market may choose to be Hispanic with respect to certain behaviors and beliefs and in sync with the U.S. mass market in others. This presents marketers and customer service managers with challenges and opportunities to serve their unique needs.


Generational Segmentation: One way to segment the U.S. Hispanic market is by generation: there are new immigrants, first-generation U.S. , second-generation, etc. This approach assumes that the longer a person has been in the U.S. , the more their lifestyle choices, and response to marketing stimuli, and purchasing decisions should reflect those of the mass market consumer.

Multidimensional Segmentation: This fails to factor in the bilinear multidimensional aspect, resulting in the 3 levels of acculturation: low, high, and bicultural. Developing more in-depth segmentation categories allowing for the bilinear multidimensional influences, coupled with research, will provide marketers an added advantage over companies that segment solely by the generational approach.

Customer Service

Trans-adaption Capabilities: Once the Marketing Department has advised Customer Service where a consumer falls anywhere on a continuum from new immigrant (unacculturated) to bicultural/multicultural (acculturated), they may choose to speak Spanish, English, or switch between the two on service calls.

Bilingual Capabilities: To effectively serve the segment, companies need to deveop a bilingual customer service infrastructure. Best practices, cited by Malaghan, provide the following:

  • Testing language skills to recruit competent and fully bilingual staff
  • Bilingual training and certification for appropriate “Business Spanish”
  • Certification of bilingual call center operations to benchmark and delivering services to best practice standards

Case Study: Banks Face Acculturation Challenges

Latino banks spend more than a year teaching their underserved Hispanic customers how to use the ATM machines because most of their customers have never used one. The bank needs to play a role in acculturating them into American society.

The following chart shows some key differences in the bank services that different Hispanic customers would be inclined to use, by acculturation level.

Hispanic Market Segment Characteristics

Snap! principle of Hispanic Market Segmentation:

In targeting and retaining U.S. Hispanic customers, companies must be willing to 1) invest in the market intelligence required for successful segmentation and 2) provide the servicing infrastructure to gain a competitive advantage in these segments.

Quinceañera parties are major celebrations to mark a Latin girl’s 15th birthday – and they can sometimes be as elaborate and expensive as some wedding celebrations.

Fabian Yépez of Rumbo Cultural Marketing helps financial institutions build relationships with Hispanic consumers. In an article provocatively titled: Marketing Financial Services To Hispanics Takes More Than Spanish Lip Service, Fabian is interviewed by The Financial Brand.

He discusses the importance and challenges of reaching out to this diverse segment, as well as one of the campaign successes of their client Grow Financial, a firm that Rumbo is currently agency of record for in Tampa, Florida. Grow Financial  teaches young girls about saving money for their own Quinceañera Party.

Q1: What is the business case for marketing banking services to Hispanic consumers?

  • A: By 2050, 1 of 3 Americans will be of Hispanic origin.
Financial institutions cannot afford to ignore the growing Hispanic market. By 2020, 1 in 5 Americans are expected to be of Hispanic origin, and by 2050, it will be approximately 1 out of 3. It needs to be understood that this is not a passing fad, and that a long-term investment will pay off. The current U.S. landscape has evolved and will continue to do so in the next few years. Especially when financial institutions focus on younger audiences, it’s necessary to pay attention to the ethnic breakdown.

Q2. What’s the biggest mistake you see financial marketers make when targeting a Hispanics?

  • A. The most common mistake is assuming all Hispanics are the same, and that they can be addressed as one big homogenous group. 

 I can’t tell you how many times we hear someone say, “We tried reaching out to the Hispanic market. We translated all our materials and it just didn’t work.” Or another example, “We were thinking of hiring a mariachi band because Latinos like mariachi bands.” The Hispanic market is complex, and there are numerous variables that need to be considered, as there will often be with any niche market.

Additional mistakes I have seen? Some financial institutions think they only need to address the language barrier. Others believe that because something worked in one market it will work in another. Many are just simply unprepared internally to deal with a Hispanic market, even if they have the language component covered.

We have been hearing these kinds of examples for years, and unfortunately they are still happening.

Q3: Why is marketing financial services to Hispanics so tricky?

  • A. It takes time to build trust.

 While conducting research a few years ago, I spoke with some tellers who mentioned that it was too much work when Hispanics wanted to open a new account, particularly Spanish speakers. They said that when non-Hispanics wanted to open an account, the customer would usually just ask where to sign and get on with their day. But with Hispanics, opening an account meant an initial visit to gather information, a second visit with additional questions, and possibly a third visit to finally agree to open the account. And each time, they came accompanied by a friend or relative.

What the tellers didn’t understand was that for many Hispanics, this could be their first account in the U.S. — maybe ever — and may feel distrust, intimidation, or simply don’t fully understand how financial institutions in the U.S. work. An important aspect about this market is that they need to feel comfortable with whom they are dealing with, and need to build and establish a relationship first. This could take three or more visits. When Latino customers get to the point where they’ll ask tellers where they might find a trustworthy babysitter, or recommend a good mechanic, then the financial institution can be certain that a solid relationship has been established.

And remember the friends or relatives that came with them in the beginning as the relationship got underway? Many of them are also likely to become customers. Word-of-mouth referrals play a huge role with this market, so the extra time and patience invested in the one initial Hispanic customer can lead to many more flooding in, just from that first contact.

Once Hispanic consumers feel that your organization understands them you will start to see results, and move on to develop enduring relationships that will last long into the future.

Q4. What have you done right to target Hispanics?

  • A. Upfront Market Segment Research is Vital

When Grow Financial FCU came to Rumbo Cultural Marketing looking for a full on Hispanic Marketing program, we started with an in-depth research phase, prior to even saying “Hola” to any Hispanic members. The Tampa Bay Hispanic market is unique, with a very diverse breakdown unlike other parts of the country. Even though there are many cultural and traditional differences among the Mexican, Puerto Rican and South American population, we were looking for something that was shared by a majority.

The result? Quinceañera parties. When a Latin girl turns 15, a significant celebration takes place to mark the transition from childhood to young adulthood. These parties are sometimes as elaborate as a wedding. Many families acquire large debt in order to throw these events, so we wanted to help make this celebration possible. Project Quince was developed as an account that allows to start saving at an early age, requiring minimum monthly deposits, and with additional benefits over a traditional savings account. It has been very well received in the local market.

Also, if financial marketers are looking for ideas to connect with Hispanics, they should take a look at BofA. I like what BofA has been doing for this market, especially when targeting Spanish-speaking Hispanics.

Mastercard Measures Women’s Financial Literacy

Chart1 B

In view of recent studies showing U.S. women to still lag men in financial literacy, an assessment of financial literacy conducted among women in the Asia-Pacific region has also turned up surprising results.  Intuitively it would seem that women in the most developed economies such as Japan, Korea, Australia or Singapore would have the highest level of financial savvy would be found in. But MasterCard Worldwide’s inaugural Index of Financial Literacy among women in the Asia-Pacific region shows this not to be the case.

The Thais Have It

The most financially savvy women were, in fact, found by MasterCard to be in Thailand, with an overall index score of 73.9 out of 100.

MasterCard’s overall index is made up of three components:

  • Basic money management weighted at 50%. This is to determine the level of basic money management skills in terms of budgeting, savings, and responsibility of credit usage;
  • Financial planning weighted 30%. This is to assess the level of knowledge of financial products, services, and concepts and the ability to plan for long-term financial needs; and
  • Investment weighted 20%. This to determine basic understanding of the various risks associated with investment, different investment products and skills required.

Notably, Thai women also had the highest scores in financial planning (87) and investments (69.3), outshining their peers in the other 12 Asia-Pacific markets surveyed by MasterCard.

Of the three components that make up MasterCard’s survey, women across the 13 Asia-Pacific countries as a whole scored the best in financial planning (average score 74.6), followed by basic money management (63.9) and investment (56.7). The overall average score across the 13 markets was 66.3.

Vietnamese Do Well Too: Also of significance was that women in another early-development stage market, Vietnam, also performed well to take sixth place with an overall index score of 70.1. Women in three other developing markets surveyed were also in the MasterCard’s index’s top-10: The Philippines (overall score 68.2), Indonesia (66.5) and Malaysia (66).

Georgette Tan, vice-president, communications for MasterCard, Asia-Pacific, Middle East and Africa, said of the strong performance of Thai and Vietnamese women in the rankings:

These are markets where rapid socio-economic advancement has given women vital and valuable first-hand entrepreneurial experience and exposure to financial planning and money management concepts.

Women in Singapore were in third overall place with a score of 72.4, thanks to good scores on basic money management (70) and financial planning (80.4). But they fell short in terms of investment skills and knowledge, scoring of 51.5, well below the regional average.

Women in Key Developed Markets Surprisingly Lag

Bringing up the rear in the survey were women in the developed markets of Korea, with the lowest overall index score of 55.9, and in Japan with the third-lowest overall index score of 59.9. Women in Korea and Japan were also the only ones in the region with financial literacy index scores of below 60.

Women In Other Developed Markets Excel

Women in New Zealand had the second highest overall index score (73.8) followed in fourth position (71.6) by Australian women, leading the field in basic money management with scores of 76.7 and 75.8 respectively. However, they both fared poorly on financial planning – coming in under the overall survey average – and on investments with scores of 58.3 and 55.2, respectively.

Indian and Chinese Women Lag

In the most populous developing markets, India and China, women had overall index scores of 62.5 and 60.1, respectively. This ranked Indian women fourth lowest and Chinese women second lowest. MasterCard found that Indian and Chinese women are particularly weak in basic money management, scoring 58.8 and 54.4, respectively.

Counter Intuitive Findings on Korean Women Yield Cultural Insights

Women are the Household Financial Decision Makers: Mastercard found that the majority of Korean women polled were the household financial decision makers. This was certainly true during my 15 years in Korea. I spent some years serving as General Manager of Marketing at Samsung Life, Korea’s leading insurer, where the traditional Financial Consultant channel was  female.

Yet Financial Literacy Remains Low: Ironically, Korean women had the lowest financial literacy scores:

  • Lowest financial literacy score (55.9)
  • Lowest in basic money management (51.1)
  • Lowest in financial planning (65.7).
  • In investing, only 22% of Korean women had a basic understanding of inflation and its impact on the future value of money.
  • Only 40% said they understood the concept of compound interest rates.
    • 36% did not understand the concept; 24% were unsure or did not know.

Japanese women had the lowest investment score (38.4).

Why? Traditional Societies Have Strong Cultural Differences

1. Little Experience With Equities Based Products: It is important to note that there are strong cultural differences that can largely account for these findings. Korea doesn’t have a long history with equities-based products. Traditionally,  investor clubs, called kae are used to raise seed money for businesses. The first recipients cede some of their cumulative periodic investment for the privilege of being the first to have access to a lump sum for investment. Later recipients receive back earnings as a result. But the pool is based entirely on monthly contributions of the members and there is no actual appreciation or interest on that pool.

2. Fixed Investments and Real Estate Are King: A second important Asian trend is a traditional emphasis on fixed income investments vs. equities. As highlighted in my article, The Declining Role of Equities, while investors in Europe, the United States, and wealthier parts of Asia, such as Hong Kong, hold 30% to 40% of their financial assets in equities, new investors in emerging economies keep 75% in deposit accounts.

General Observations and Conclusions

Women Need to Round Out Their Financial Skills: As an overall observation, while it is a broad generalization, women from traditional societies where they are the household decision makers tend to excel in money management, yet fall short in  investment skills and knowledge.

By contrast, research on U.S. women shows them still lacking confidence in money management skills, although their long-term family-oriented focus equips them to do better than U.S. men in long-term planning.  In comparison, the more transactional quantitative decisions such as budgeting or investing are typically more appealing to U.S. men who enjoy the “game” of it, than to U.S. women.

Financial Literacy Education Is Invaluable: The high scores of the women of Thailand, New Zealand, Singapore, Australia and Taiwan show that, regardless of cultural differences,  empowered women anywhere are a force to be reconed with.

One finding of the MasterCard research that can be generalized to all women was a close correlation between financial knowledge and planning - women who exhibited higher levels of financial literacy were more likely to be proactive in planning for their future. This shows that financial literacy training can be a potent tool for women financial consumers.

At Samsung Life, we invested heavily in educating the Financial Consultants in principles of financial planning that they could pass on to their clients, while introducing variable life, annuities and mutual funds to the product mix. The results were highly successful. This shows that an investment in female financial literacy is an invaluable investment for financial firms.

Financial planners have a receptive market with U.S. women, who have an advantage over U.S. men in long-term planning skills, and one way to reach them is to recruit and develop more female financial planners.  Helping women to round out their money management and investment knowledge will make them more confident consumers for investment products. In particular, women’s lower risk tolerance would make them a natural market for today’s Equity Indexed life insurance and annuity products, as well as Variable Annuities with living benefit guarantees that lock in gains and guarantee an income base for future annuitization.

Related Articles

Study: Gender Gap In Financial Literacy Grows

Seven Steps to Overcome Women’s Top Money Fears

The Declining Role of Equities

Equity Indexed Universal Life Insurance: Enticing New Alternative

Indexed Annuity Sales Excel in Low Interest Rate Environment

More Wealth, More Challenges

Prudential Financial’s latest biennial study of women and money released this month shows that women are becoming a greater economic force:

  • 53% of women are now financial breadwinners.
  • Womens’ median income has grown 63% in the last three decades.
  • They are expected to control $22 trillion in wealth by 2020.

Special Financial Challenges

However, women face a specific set of financial disadvantages that make it increasingly important for them to be responsible for their own long-term financial health:

  • Women are more concerned than men about household expenses, debt and their ability to save for retirement.
  • Women are more afraid of becoming burdens to their families.
  • With an average widowhood age of 56, but an 80.8 year life expectancy, women need to plan for their long-term futures.
  • Women are more risk-averse when it comes to investing.

Takeaway: Women need to do more to plan for their economic well being.

Women’s Top Money Fears

Michelle Matson, author of Rich Chick and vice president of Matson Money, an investment advisory firm managing over $3.1 billion, was interviewed by Jenna Goudreau in Forbes about women’s top money fears and how to overcome them
She  says that women’s biggest fear of failure due to not knowing enough. She says that women often become overwhelmed by the information proliferation, and feel they have to be smarter than everyone else to succeed.
Bearing in mind that, while men may be motivated by the thrill and challenge of investing, women are typically more concerned with the long-term results, Matson recommends 7 small changes that can make a big impact in helping women becoming more confident about their finances planners.

7 Small Steps to Confidence

1.Start Today

“Bag lady syndrome” is Matson’s term for the fear women often suffer of being penniless, homeless and alone. This fear may escalate small money concerns into visions of total destitution:

It can paralyze you. You don’t know what to do, so you don’t do anything.

To conquer the fear, face it. Express to your partner that you’d like to learn more about your finances, or schedule time to review where you currently stand.

2. Wade In Slowly

Instead of trying to do too much right away, Matson suggests moving slowly to learn and understand your finances and consider a financial plan. Locate and read all of your financial statements to get a snapshot of your current accounts. A good place to start is with financial books written specifically for women like Matson’s Rich Chick, or Women & Money by Suze Orman pr Does This Make My Assets Look Fat? by Susan Hirshman.

3. Identify Goals

Establishing a vision of the future helps to set realistic goals to achieve it. Perhaps your goal is to buy a home or own your home outright. Once you understand where you are and identify where you want to be, you are ready to create a plan for getting there.

4. Learn And Understand Your Strategy

Matson finds that many women get comfortable once there’s a strategy in place and fail to take the time and effort to understand and review it.  But the more you understand it, the better you can make it work long term. More understanding leads to more confidence and generally better results. She points out that men don’t necessarily make better investing decisions, but are more likely to seek out the information that will guide their decisions.


5. Keep Interviewing Your Financial Advisor

The Prudential survey finds that 35% of women use a financial advisor and a significant portion also would consider doing so. This is a good trend, but  women must also take responsibility for this relationship and ensure they understand all actions and communications. Since a good advisor will act as a coach and take the time to explain and answer questions, consistently ask questions and know the reasons for recommendations.

6. Take A Financial Class With A Friend

Woman can feel like they’re not alone and turn learning about money from a chore into something fun by joining a program with a friend. Discussing the knowledge with your companion can help you reinforce it and give you incentive to stick with it.

7. Teach Money Basics To Your Kids

Learning through teaching is a powerful way to reinforce your knowledge and confidence. Discussing the basics of money, your financial philosophy and your long-term plan with your children not only provides them these tools, but can help you clarify the concepts for yourself. These conversations can occur seamlessly in your daily life— for instance,at the register  or at home when paying the bills.

Considering that the Society for Human Resource Management‘s report 2012 Gender Gap in Financial Literacy Research shows women still lagging men in in key areas of financial planning with the gap between the genders widening in nearly every area of financial planning, simplifying and reinforcing can be an important means of boosting women’s financial understanding and confidence.

Significantly, women have an important advantage over men as well, since the report showed that woment tend to do better with long-term planning, taking small steps can go a long way to helping women secure their family’s and their own financial future. In fact, while short-term, more transactional quantitative decisions such as budgeting or investing appear to be more appealing to men who enjoy the “game” of it, women bring a long-term focus to the process that men often lack.

Related Article

Study: Gender Gap In Financial Literacy Grows

Financial Literacy Gender Gap

According to the Society for Human Resource Management, a report by workplace financial education provider Financial Finesse, 2012 Gender Gap in Financial Literacy Research, shows women still lagging in in key areas of financial planning. The report identified that the gap between the genders is widening in nearly every area of financial planning.

The data was compiled by tracking the use of Financial Finesse’s online financial wellness assessment and learning center by employees located across the U.S. in similar proportion to the demographics of the national population.

2 Areas of Concern

According to the findings, the gender gap is most pervasive in two areas that are critical to achieving financial security.

Basic money management:

• 43% of women reported having an emergency fund to cover unexpected expenses, vs. 63% of men.

• 52% percent of women said they were comfortable with the amount of nonmortgage debt they had, vs. 71% of men.

Investing knowledge and confidence:

• 37% of women said they have taken a risk tolerance assessment and were aware of their conservative, moderate or aggressive investment strategy, vs. 57% of men.

• 25% of women reported rebalancing their investment accounts to keep their asset allocation plans on track, vs. 49%  of men.

Area of Parity: Planning

However, in two areas that tend to be proactive in nature,  women showed virtual equality with men – participation in:

  • Retirement planning
  • Estate planning.

Area of Advantage: Long-Term Planning

Women “tended to do better with long-term planning, which is about securing their family’s future. Short-term, more transactional quantitative decisions such as budgeting or investing, however, appear to be more appealing to men who enjoy the “game” of it.

Women Face Greater Challenges

The findings highlight certain challenges that women face that are not being adequately addressed:

  • Women should be the ones putting more focus on improving their finances because they face more challenges than men in financial planning.
  • Women Have Longer Lives: Women live approximately five years longer than men on average, and 9 out of 10 women will be solely responsible for their finances at some point in their adult lives because of divorce or the death of a spouse, according to the National Center for Women and Retirement Research (NCWRR).
  • Women generally make less throughout their lifetimes than men, making it difficult to become financially secure.
  • Women have lower average Social Security payments and higher health care costs, putting them at a disadvantage financially.

Women Are Open to Improvement

The good news is that women are seeking financial education and information at very high rates:

  • Women typically seek financial education about 2 to 1 compared to men.

As employers continue to deliver financial education programs that effectively reach women, we should start to see this gap narrowing. However, the financial services industry needs to focus on this issue more to help women see the importance of closing the gap to creating financial security for themselves and their families.

Related Articles:

Challenging Retirement Realities for WomenSHRM Online Benefits Discipline, May 2012

Encourage Employees to Defer Adequate Pay to Their 401(k)SHRM OnlineBenefits Discipline, May 2012

Women and Men Differ on Retirement Plan Investments, SHRM OnlineBenefits Discipline, February 2011

The “Personalization” of Jazz

Acknowledging the limitations of analogies, Charlie Parker , often credited as the inventor of modern jazz, was somehow able to break through the Big Band music era to push the boundaries of music, bringing jazz to a game changing transition that led from the structured Big Band era to the era of personal improvisation. I believe this parallels today’s American market, as it evolves from mass consumption to mass personalization.

Charlie Parker, while playing in genre of Big Band music, with Jay McShann’s band, practiced diligently. He said that he spent 3–4 years practicing up to 15 hours a day. The Musical standard setters of his time, like Count Basie and Bennie Moten undoubtedly influenced him. Yet, he was dissatisfied with the attainment of mastery in these limited systems and sought something more compelling and expressive, reflecting the evolving consciousness of the era.

He says that one night in or 1942, while he was playing “Cherokee” in a jam session with guitarist William “Biddy” Fleet, he had the insight that the twelve tones of the chromatic scale can lead melodically to any key, breaking some of the confines of simpler jazz soloing, an insight that led to the development of an entirely new system. The new system encompassed ways to build improvisations on top of chord progressions and methods for adding chords to existing chord progressions while implying additional chords within improvised lines. Parker recalled:

I’d been getting bored with the stereotyped changes that were being used, … and I kept thinking there’s bound to be something else. I could hear it sometimes. I couldn’t play it…. I was working over ‘Cherokee,’ and, as I did, I found that by using the higher intervals of a chord as a melody line and backing them with appropriately related changes, I could play the thing I’d been hearing. It came alive.

Applying insight to technique, he experienced new freedom and blasted past the self imposed limitations of popularly proscribed theory and practice. Penetrating insight into the elements of musical theory revealed to him the essence of music, and these elements emerged in ways never before experienced.

Reflections of A Changing Culture

Bebop, while revolutionary, grew out of a cultural mindstream that was evolving toward more individualistic forms of expression. The chord progressions for bebop tunes were often taken directly from popular swing-era songs and reused with a new and more complex melody. While this practice was already well-established in earlier jazz, it came to be central to the bebop style.

Bebop musicians also introduced several harmonic devices not typical of previous jazz. Complicated harmonic substitutions for more basic chords became commonplace – they emphasized certain dissonant intervals such as the flat ninth, sharp ninth, or the sharp eleventh/tri-tone.

Changing Voices of the American Experience

Bebop also grew out of a very personal frame of reference, that Parker, as an African American, understood from the inside-out. Gerhard Kubik postulates that the harmonic development in bebop sprung from the blues, and other African-related tonal sensibilities, rather than twentieth century Western art music, as some critics have suggested. Kubik states:

“Auditory inclinations were the African legacy in [Parker’s] life, reconfirmed by the experience of the blues tonal system, a sound world at odds with the Western diatonic chord categories. Bebop musicians eliminated Western-style functional harmony in their music while retaining the strong central tonality of the blues as a basis for drawing upon various African matrices.”

So, while an outside observer might attribute the harmonic innovations of bebop to have been inspired by experiences in Western “serious” music, from Claude Debussy to Arnold Schoenberg, and Claude Debussy did have some influence on jazz, as on Bix Beiderbecke’s piano playing, and Duke Ellington’s reinterpretion of some harmonic devices in European contemporary music, bebop has was a strong statement of rejection of any kind of eclecticism, propelled by a desire to activate something deeply buried in self.

A Groundswell of Change Across America

While Parker remains the leading figure in the development of bebop,  it is important to remember that the movement reflected the growing voice of the the African-American demographic in American culture.

African-American jazz musicians like Parker were growing increasingly resentful in post WWI America, of the social conventions that limited their opportunities. During the swing era, nearly all jazz bands were racially segregated, and that audiences too were separated by race, with black musicians often playing in establishments where they would not be welcome as customers.

Working independently of one another, alto saxophonist Charlie Parker and trumpeter Dizzy Gillespie became increasingly interested in extending the harmonic language of jazz. By employing altered and substitute chords, they began to use improvisation to rework and expand a song’s original harmonic structure, and developed the technique of playing complex improvisations containing asymmetrical accents and phrases at very rapid tempos. Similar experiments were being performed by pianists Bud Powell and Thelonious Monk, who were using angular melodic figures and dissonant chords, abandoning the simple riff-based melodies of swing; and by drummer Kenny Clarke who introduced complex approaches to jazz rhythm using off-beat rhythmic punctuations on the snare and bass drum.

These attempts to develop new musical strategies did not have an immediate impact. During the 1930s, since these young and innovative musicians had little contact with one another, and generally worked on their new ideas in isolation, and the early innovations that lay the groundwork for bebop thus evolved more or less independently. Only after these musicians began to interact regularly with each other did these innovations began to develop into a recognizable style.

The emergence of bebop as a coherent musical style thus required the congregation of a community of innovators in a locale that supported musical experimentation.

 Change Has a Trajectory of It’s Own

Bebop’s sweeping influence would never have been predicted by the average 1940s Anglo Saxon American male.  Here was a revolution that effected broad changes across American culture. Both as a music and in the stances taken by the individual musicians, it reflected that new confidence and self assertiveness: more than any previous form, it stressed the individual soloist, his ideas and his feelings. And in going back to the blues as the roots of jazz, it also stressed that this was a black music, changing the face of America inexorably. As Ross Russell put it:

For urban black people of his generation, Charlie [Parker] was a genuine culture hero. The revolutionary nature of his music was explicit. He had rephrased Negro music without altering its essential truth and purity. Implicit in his lifestyle was defiance of the white establishment… every episode in the cumulative legend of the Bird, however ineffectual and childish, was seen as a blow struck against the forces of oppression. In the mid-1940s there was no Martin Luther King Jr., no Malcolm X… In a sense Charlie was a fore-runner of those militant figures of the political arena. He was completely non-political, in fact never in his lifetime so much as cast a ballot… Charlie Parker was the first angry black man in music.

Applications to Today’s Markets

The American experience today is undergoing fundamental changes that in many ways mirror the emergence of bebop and a post bebop era in 1940s America. Key demographic trends are changing the American workforce. Rapid changes in demographics, technology, and the economy are leading to new frames of reference that are converging in new and unpredictable ways. Where will it all lead? As in the bebop revolution, it is probably impossible to predict with extreme accuracy. Just as the isolated innovative jazz musicians of the 1930s began to coalesce around a new musical lexicon  as they began to interact regularly with each other, the effect of social media in bringing consumers together around like interests has incredible potential.

Customization, Personalization & Community Experiences

In some ways, the example of bebop is shown in the changes that are already transforming Marketing in America today.  Just as the emergence of bebop led to a counter culture and the widening influence of African American cultural voices within the broader context of American experience, today’s consumers are increasingly self referencing, and this is changing the discipline of Marketing.

The Rise of the Individual Consumer Interest Group: Decision Analyst highlighted customization, personalization, and community experiences as a fast emerging trend.  Today’s consumer brands are increasingly reaching out to unique, homogeneous groups of consumers to deliver customized and personalized goods and services to them. The emergence of communities, where shared interests act as cohesive and binding connections, provide both insights into the needs of these unique groups of consumers and challenges of tailoring messages and products for those groups.

One implication is that social networks should continue to emerge as a major driving factor in the success or failure of certain consumer brands. These networks are growing on a global basis, with many network members only communicating with other network members on a virtual basis, and never interacting in person.

Another implication is shifting perception of quality and luxury items. Whereas in the 20th  century, price levels often signified differing levels of quality, current manufacturing techniques have almost erased this distinction, such that even the entry-level automobiles and televisions (Kia/Hyundai) are built to very high-quality standards, and the concept of high prices translating into high quality may largely evaporate. Automobiles and televisions, formerly luxury and status-conveying items, have moved from aspirational goals to expectations of basic lifestyles.

Emerging Youth Demographics: As the baby boomer generation enters retirement, the echo boomers, progeny of this baby boom generation, is about to dominate the workforce. Raised in an era of relative luxury, with immediate gratification for most basic needs, the youth of the world will play an increasingly vital role in identifying new product and service requirements, in causing a rapid spread of new trends and lifestyles, and in changing the ways in which businesses interact with them.  Key issues for youth will include:

  • the dynamic of health and wellness versus increasing obesity, the incorporation of traditional and holistic medical practices, and the exploration of health and relaxation techniques from around the world. Yoga and eclectic foods will begin to replace golf and beef steaks. In the United States, for example, golf courses are already seeing rapid declines in utilization as the golfing population shrinks.
  • As the expected life span of people continues to lengthen, this will place a related demand on medical services and assisted living facilities.

Marketing- Discipline or Art?

Another important takeaway from the example of Charlie Parker and his fellow innovators, is to look at how he resolved the tension between the discipline and art of music. The tension between the discipline and art of Marketing is summarized in the two aims of Marketing:

  • Measurable performance through application of sound principles, including optimal exposures, precise positioning and messaging.
  • Insights and innovation to blasting through market categories to achieve a highly differentiated and evocative brand.

A person relying on the tried and true technical practices of Marketing can be likened to a musician who loses himself in the technique – scales, arpeggios and chords – but never develops the ability to manifest the art in a way that transcends the self limiting conventions of the popular idiom to break through to something highly differentiated and evocative.

Today’s increasingly personalized consumer dynamics means that we must access and respond to customer insights in a more agile way. In Beyond Customer-centricity: Anticipating the Customer,  I write about moving from insight to foresight – from knowing today’s needs  to anticipating tomorrow’s needs and values.

This means that we must be forward looking and proactive. Instead of asking customers what they would like, we need to move beyond this, as customers will not always be able to anticipate their needs, and, as a corollary, from our limited frame of reference, we cannot understand their rapidly changing beliefs and values.

The foresight to anticipate what will be possible and give it to consumers before they even ask has helped propel leading technology brands like Facebook. Like this, we must continue to interact, quickly respond, test market, and to increase our ability to measure results in real time.

The insight that we bring to Marketing increasingly comes from interacting with and researching consumer groups.   We need to be able to improvise, based on sound disciplined focus on our customer segments and their core values, beliefs and preferences.

Snap! principle of Improvisational Marketing:

Know your Marketing science, but continuously strive to perfect your art.

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