Special Session Summary the Original Marketing Paradox: Aproduct Needs@ Versus Aindividualized Financial Solutions@: Predicting and Understanding Consumer Saving Behavior Using a New Methodology to Assess the Dynamics of Psychological Variables


Johan de Heer, Ton Kuijlen, and Leo Paas (2001) ,"Special Session Summary the Original Marketing Paradox: Aproduct Needs@ Versus Aindividualized Financial Solutions@: Predicting and Understanding Consumer Saving Behavior Using a New Methodology to Assess the Dynamics of Psychological Variables", in E - European Advances in Consumer Research Volume 5, eds. Andrea Groeppel-Klien and Frank-Rudolf Esch, Provo, UT : Association for Consumer Research, Pages: 51-53.

European Advances in Consumer Research Volume 5, 2001      Pages 51-53



Johan de Heer, Tilburg University, The Netherlands

Ton Kuijlen, Tilburg University, The Netherlands

Leo Paas, Tilburg University, The Netherlands

This session documents some recent developments in research on consumer saving behavior. Three studies are reported that examine the factors that may predict saving behavior. In particular, we focus on economic and psychological factors and their relationship, which can predict the position the consumer takes in the saving need hierarchy and which factors predict the next position in this hierarchy. The studies in the session focus both on Economic Psychology theory, methodology and marketing and managerial implications. The goal of the session is to understand when and why consumers acquire (more) financial products?

It is paramount to understand how consumers make decisions concerning financial products (e.g., checkings, savings, investment trusts, shares et cetera). The difference between the success and failure of new and existing saving products largely depends on economic and psychological variables. The tremendous marketing activities in advertising financial products point to the crucial importance of the predictability of saving behavior. The empirical research on the topic has been limited and mainly studied from a business economic point of view. The few psychological attempts have shown methodological difficulties. Furthermore, these studies did not take into account the surplus value and the changing roles of the psychological variables in the understanding of moving up positions in the saving need hierarchy, which is to acquire more sophisticated financial products.

Each of the three papers in this special session builds on this developing research stream in various ways. The first theoretical paper, by DeHeer, concerns an economic psychology framework on saving behavior, i.e. the saving need hierarchy model (WSrneryd, 1999). The second paper, by Paas, is of an empirical nature and explains the steps taken in a hierarchy of saving products and relates these to different saving needs. It proposes a new methodological approach in which the pros and cons are discussed. The third and final paper, by Kuijlen, reports an empirical study and focuses on the relationship between the acquisition pattern of financial products and the information that is needed to move through the hierarchy. The implications of this type of research are discussed in terms of economic psychological theory and in terms of applied marketing research.



Johan de Heer, Tilburg University, The Netherlands

The first paper concentrates on a theory proposed by Lindqvist (1981; cited in WSrneryd, 1999) and later refined by Wahlund (1991; cited in WSrneryd, 1999) and Wahlund and WSrneryd (1987; cited in WSrneryd, 1999) and further elaborated upon by WSrneryd (1999). This theory proposes that saving motives can be ordered hierarchically, as displayed in Figure 1.

It should be noted that very few advanced analyses of data relating to the saving need hierarchy have been carried out. In line with suggestions by WSrneryd (1999, p. 300) a bridge is built to the main purpose of research on saving, that is predicting saving and trying to influence saving.


WSrneryd, K.E. (1999). The psychology of saving: a study on economic psychology. Cheltenham [etc.]: Edward Elgar



Leo Paas, Tilburg University, The Netherlands

The second paper has two parts. Part A proposes that utilities of different financial products can be relevant for each specific saving need in figure 1. It is, therefore, hypothesized that the different motives in figure 1 lead to the acquisition of different saving products. For example, the need for cash management could lead to the acquisition of a checkings account while the need for a financial buffer could spur interest in the utilities of a saving account. If saving needs are hierarchically ordered then products should be required in the same order by a majority of consumers. Products that possess utilities, which support the satisfaction of basic needs are usually acquired before products with utilities for satisfying higher order needs.

A data set from a financial service provider is available for the present study. This data set consists of a random selection of 543 Dutch households. The sample was interviewed in July 2000. Respondents were asked to indicate whether their household owns the following financial products: (1) Checkings Account(s); (2) Saving Account(s); (3) Investment Trust; (4) Shares. Demographic information is also available, i.e. age of the head of the household, level of education received by the head of the household and family income. Moreover, respondents were asked to answer questions concerning psychological factors, which are considered relevant for their saving behavior.

The result of the first analyses showed that households acquire these four financial products in a highly homogeneous order. It was found that most consumers first acquire a checkings account, then usually a savings account, consecutively the majority of consumers acquire an investment trust and last of all shares. This order is further referred to as the acquisition pattern (see Paas (1998) for details on the procedures) (Figure 2).

The second analyses (the OVERALS procedure in the SPSS) showed that the position a consumer takes in the acquisition pattern relates to the position s/he takes in the saving need hierarchy (discussed in the first paper). This relationship between the acquisition pattern and the saving need hierarchy suggests that households are usually triggered by different motives when acquiring the #next’ financial product(s). For example, households who own none of the products displayed in Figure 1 are probably seeking to satisfy a need for cash management. Subjects that make the financial decisions in such households are most likely inclined to acquire a checkings account. While wealth management motives are probably more relevant for acquisitions by households owning the first three products in the acquisition pattern.

Part B builds on Part A and reports the relevance of psychological variables for consumer saving behavior. Based on the relationship between acquisition pattern and the saving need hierarchy we assume that attitudes may play dynamic roles in the steps taken through the acquisition pattern. We again analyze the data set used in Part A; we now focus on the relationship between acquisition pattern and the demographic and psychological variables. Previous studies concerning these relationships concentrated on coherence between (1) the number of steps taken in the acquisition pattern of financial products and (2) values consumers have on economic and/or psychological variables (Kamakura et al., 1991; Soutar and Cornish-Ward, 1997; Paas and Kuijlen, 1998). However, if one accepts that psychological variables play different roles in various stages of the acquisition pattern, then this type of analysis is unsuitable. Concentrating on coherence between the number of steps taken in the acquisition pattern and psychological variables as such is limited because it is quite possible that the effects of psychological variables may cancel each other out. For example, negative effects on the probability of taking the first steps in the hierarchy may be cancelled out by positive effects on taking higher order steps. Therefore, the average effect of psychological variables on the number of steps taken in the acquisition pattern may be small or even insignificant. A new approach of analysis is needed and proposed here.





The methodology captures and extends the sequential Logit decision model (Amemiya, 1975; Madalla, 1983). In essence, the sequential Logit decision model assumes a deterministic sequential hierarchy for the acquisition patterns of financial products. This deterministic assumption is, given the dynamics of the psychological variables, too strong and therefore the new approach allows probabilistic steps (skipping behavior) as well. The results clearly show that psychological factors are important and relevant for taking different steps in the acquisition patterns.


Amemiya, T. (1975). Qualitative models. Annals of Economic and Social Measurement 4, 363-372.

Kamakura, W.A., Ramaswami, S.N., Srivastave, R.K. (1991). Applying latent trait analysis in the evaluation of prospects for cross selling of financial services. International Journal of Research in Marketing, 8, 329-349.

Madalla, G.S. (1983). Limited-dependent and qualitative data in econometrics. Cambridge: Cambridge University Press.

Paas, L. J. (1998). Mokken Scaling characteristic sets and acquisition patterns of durable- and financial products. Journal of Economic Psychology, 19, 353-376.

Paas, L.J., Kuijlen, A.A.A. (1998). Analyzing generic needs through Mokken Scaling and the Multi Nominal Logit Model. Journal of Targeting, Measurement and Analysis for Marketing, 7, 145-154.

Soutar, G.N., Cornish-Ward, S. (1997). Ownership patterns for durable goods and financial assets: A Rasch analysis. Applied Economics, 29, 903-911.



Ton Kuijlen, Tilburg University, The Netherlands

In the second paper it was demonstrated that consumers often acquire financial products in the same orders. It was found that the acquisition of products was influenced by psychological variables. The focus of the present paper is on the influence of these psychological variables on information gathering and decision-making. For example, the basic need for a financial buffer against unforeseen events may be satisfied through the acquisition of a savings account. Consumers need little information and advice when making decisions regarding financial products that apply to basic needs and take a relatively low level in the acquisition pattern. On the other hand, financial products that satisfy higher-order needs and take relatively high levels in the acquisition pattern rely on more complex decision making processes. Before the latter kind of decisions is made more information is gathered.

Two types of information sources or channels are distinguished. The first concerns direct channels (e.g., e-commerce, call-centers, flyers) and the second concerns personal channels (e.g., intermediaries or other financial experts). Direct channels provide easy and highly accessible, less time-consuming but general information while personal channels provide personalized, tailor-made but time-consuming information (Kuijlen, 1993). The idea here is that direct channels are consulted with the acquisition of basic financial products and personal channels are consulted when acquiring higher-order financial products. This proposition is empirically tested.

If we find empirical support for the proposition, just forwarded, then we try to elucidate the underlying consumer characteristics that may influence the choice between gathering information through a direct or personal channel. In other words, such analysis may provide insight on the type of information (e.g., general or personalized) needed by consumers at different stages on the acquisition pattern.

We used the same data set as in the second paper. For each level in the hierarchy of the acquisition pattern a Logit analyses was conducted. The categories of predictors were [1] economic (demographic) variables, and [2 psychological variables (see also paper 2). These predictor variables were used to explain the type of information channel (personal or direct) through which this specific products were acquired. The results show that both economic and psychological variables contribute to the understanding of which information channel is consulted.


Gunnarsson, J., Wahlund, R. (1997). Household financial strategies in Sweden: An exploratory study. Journal of Economic Psychology, 18, 201-233.

Kuijlen, A.A.A. (1993). De scenariobenadering: Een onderzoek naar complexe consumentenbeslissingen met behulp van computergestuurd enquOteren (English: The scenario approach: A study on complex consumer decisions through computer driven interviews), doctoral dissertation. Tilburg: Tilburg University.


The session concludes with discussing the relevance of the findings from paper 2 and 3 in the context of the proposed model in paper 1. This conclusion is in terms of economic psychology theory and in terms of applied marketing research. In brief, for economic psychology our research provides insight into decision-making processes concerning acquisitions of financial products. Further, it also contributes to our understanding of information gathering that are relevant for making such (simple and complex) decisions. Managerial implications for applied marketing discusses [1] which consumers are prospects for specific financial product in the acquisition pattern, and [2] for which consumers direct channels or personal channels are effective means to distribute financial products.



Johan de Heer, Tilburg University, The Netherlands
Ton Kuijlen, Tilburg University, The Netherlands
Leo Paas, Tilburg University, The Netherlands


E - European Advances in Consumer Research Volume 5 | 2001

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