MGMT WK1 Cultural values in financial

Cultural Values in Financial Services Advertising: A Cross-Cultural Study

Introduction

• Authors: Young-A. Song, Hongmin Ahn, Yongjun Sung

• Objective: To investigate cultural differences in financial services advertising (FSA) between the USA and Korea.

• Methodology: Analyzed 1,889 FSA (1,486 from the USA; 403 from Korea) in business/news magazines between 2005-2009.

Findings

• Cultural Differences:

  • Significant differences in themes of collectivism vs. individualism, high vs. low cultural context, presence of human models/celebrities, and time orientation.

  • No significant difference in individualistic cues between the USA and Korea.

• Practical Implications: FSA must reflect cultural values to resonate with consumers abroad.

Financial Services Industry Overview

• Economic Contribution: Accounts for about 21% of global GDP, serving as a growth engine through international trade and cross-border investments.

• Global Strategy: Financial services companies adopt globalization strategies to appeal to diverse consumer bases, often leading to missed engagement opportunities due to a lack of cultural sensitivity.

  • Specific examples include HSBC and Citigroup emphasizing global relevance in branding.

Importance of Cultural Sensitivity in Advertising

• Advertising Strategies: Effective marketing communication considers local cultural values to avoid miscommunication.

• Culturally Congruent Messages: Evidence suggests that culturally relevant advertising results in higher consumer engagement and favorable brand attitudes.

Literature Review and Theoretical Background

Financial Services Advertising (FSA)

• Characteristics of FSA:

  • Intangibility, inseparability, perishability, and unique execution challenges due to the nature of services.

  • Immediate purchase decisions can be tricky; hence, informative ads can help reduce perceived risks.

Cultural Dimensions in Advertising

Key Cultural Frameworks

1. Hofstede’s Individualism-Collectivism

   • Individualism values personal freedom, while collectivism emphasizes group harmony.

   • Expected Theme Differences:

     • USA: More individualistic themes.

     • Korea: More collectivistic themes.

2. Hall’s High vs. Low Cultural Context

   • High-context cultures rely on implicit communication, while low-context cultures prefer explicit information.

   • Hypotheses:

     • US ads focus on low-context communication.

     • Korean ads focus on high-context communication.

3. Human Models and Celebrity Presence

   • Human models convey emotional connections; often more common in high-context cultures (Korea).

   • Celebrity endorsements are utilized differently across cultures.

4. Time Orientation in Advertising

   • Reflects different cultural motivations (past, present, future).

   • American ads likely to emphasize future orientation due to industrialized context; Korean ads show varied orientations.

Methodology

• Sample: Chose Forbes and Newsweek for ad analysis due to their popularity and representation.

• Categories for FSA:

  • Personal investment, banking services, insurance, credit cards, others.

• Coding Scheme: Developed based on existing research, focusing on themes of individualism/collectivism and time orientation.

Results and Discussion

Individualism and Collectivism Results

• US ads had a higher presence of individualistic themes, but the difference was not statistically significant.

• Korean ads displayed more collectivistic themes, confirming cultural notions.

Contextuality and Human Element Findings

• Korean ads had significantly higher contextual cues; US ads were more direct and explicit.

• More human models and celebrity endorsements were found in Korean ads.

Time Orientation Findings

• US ads prominently featured future-oriented messages compared to Korean ads, which utilized a wider variety of time orientations.

Implications for Marketers

• Cultural Adaptation: Recognizing that FSA messages should align with local cultures to be effective.

• Future Considerations: Increasing globalization requires sensitivity to dual cultural values in ad strategies.

Limitations and Future Research Suggestions

• Limited Comparative Scope: Findings are primarily based on USA and Korea; additional research involving diverse cultures is warranted.

• Product Category Focus: Need to explore how cultural values manifest in various advertising contexts beyond financial services.

Conclusion

• This study confirms that marketing communications, especially in the finance sector, must navigate cultural differences carefully. The unique characteristics of both advertising and cultural context play critical roles in shaping consumer perceptions and behaviors.