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

 

 

 

Hirono

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.

Marketing

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

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