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Gender Gap in Retirement Savings


In this roundup of B-school research: why women are better savers, it's good to talk up your rivals, and how a logo can spark ideas

Women are more motivated than men to save for retirement, according to a recent report from the Tuck School of Business at Dartmouth College. The research, by Dartmouth professors Punam Anand Keller and Annamaria Lusardi, found that women are driven to save because of worries that they'll have to work longer to maintain a certain lifestyle and attain medical care and a fear that they'll lose their home and be dependent on family.

Men, on the other hand, were more likely to say they would not have to stop working and believed they would need less money when they retired. Some also suggested they preferred feeling good now instead of in the future. This thinking is what prevents some from saving for retirement, says Keller, whose team conducted surveys, in-depth interviews, and focus groups for the research.

The goal of the study, says Keller, was to determine how best to market employee well-being programs, including those related to financial health. She and her team used the findings, which will appear in the book Overcoming the Saving Slump: How to Increase the Effectiveness of Financial Education and Saving Programs (University of Chicago Press, due out in Fall, 2008), to develop a program designed to motivate employees of companies to sign up for retirement saving initiatives.

A Tastier Carrot

Using a social marketing approach to saving for retirement, the researchers created a program for Dartmouth that targeted groups that were less likely to save. "I use the power of marketing and persuasion tactics to devise new savings programs for people who may be aware of the need to save, but this awareness does not translate into behavior," writes Keller in a two-page summary of the findings.

Her team offered a one-sheet explanation of how people could get started with saving, created a Web site that features real people sharing their personal stories about saving, and did what it could to lower the barriers that were preventing people from signing up for employee saving programs. For example, people who do not have a computer at the ready were using that as an excuse not to sign up, so Keller informed those who attended meetings where laptops were available nearby. "We wanted to motivate them," says Keller.

Apparently, the project was successful. As a result of these efforts, which Keller says are inexpensive for companies to initiate, the rate of Dartmouth employees electing retirement plans more than tripled in a 30-day period after the program's launch. More organizations are seeking help in this area. Keller is working with the Financial Industry Regulatory Authority (FINRA), National Endowment for Financial Education (NEFE), and AARP to help them apply social marketing to financial planning for their members.

It Helps to Mention the Competition

You're better off talking about your competition if you're interested in establishing a new market, according to a study published in the April, 2008, issue of the American Sociological Review. Traditionally innovators have been instructed to speak solely about their products and services when relaying their message to the media. However failing to mention your competitors can backfire because journalists might be inclined to consider you a "lone voice" that they can overlook, according to the research of Mark Thomas Kennedy, assistant professor at the University of Southern California Marshall School of Business.

Kennedy collected 60,000 pages of media coverage about the market for computer workstations developed between 1980 and 1990 and then converted the material into mental maps—or visualizations —of the competition among technology market companies to show which ones had more success creating the market. This led him, he says, to the discovery that forming networks with competitors is the most effective way to get journalists to take you seriously and send your message to the public. Mentioning them in interviews, he says, can benefit the whole market by creating legitimacy. "You're not for real until you have the right critical mass of people saying you're for real," Kennedy says. "It's more than what happens in the lab."

Kennedy is now looking into where there is such a thing as bad press and how visibility can backfire. Business schools, he says, should spend more time educating students on how the media work, and they can do this by supporting and disseminating research like this: "I'm showing that media is an important way to tell people that what you're doing really matters."

Subliminal Smarts

Apple's bold ad campaigns are indelibly printed in consumers' minds, from their famous 1984 "Big Brother" Super Bowl commercial to the "Think Different" campaign of the 1990s. The ads helped the company cultivate an aura of innovation, but can the mere sight of the Apple logo impart more creativity to ordinary viewers?

According to one study, the answer is yes. Researchers Gavan Fitzsimons and Tanya Chartrand of Duke University's Fuqua School of Business and Grainne Fitzsimons of Canada's University of Waterloo found that even the briefest exposure to the Apple logo can make people think more creatively.

In an experiment they divided 341 undergraduates into groups and gave them a visual acuity test during which a box popped up on their computer screen followed by either the Apple or IBM logo. The logos flashed onto the screen so quickly—for about 30 milliseconds—students didn't register them consciously, a form of subliminal advertising. After this exercise, participants were divided into two groups and asked to come up with all of the possible uses they could think of for a brick, beyond building a wall. Those exposed to the Apple logo had an increase of about 15% to 30% in terms of the actual numbers of uses people came up with for the item, compared with groups exposed to the IBM logo. Independent judges who rated the submissions for uniqueness and creativity also awarded significantly higher scores to the Apple-logo group.

Innovation Spurred by the Apple

The results of the exercise, published in the April issue of the Journal of Consumer Research, surprised the researchers in part because the notion of subliminal advertising has largely been discredited since a famous experiment in 1957 by researcher James Vicary was revealed to be fraudulent. "We were a little skeptical because of all this stuff that had been debunked," said Fitzsimons. But new research in the field encouraged the research team to use subliminal advertising in the experiment because it was the strongest test of whether incidental brand exposure could have an impact on a consumer, they said. The researchers subsequently ran the study more than a dozen times, and each time the results were replicated.

The researchers suggest that Apple's brand personality as an innovative company is so strong that people exposed to it, even on an unconscious level, push themselves to be more innovative. It's an image the company has been pushing for more than 30 years and, as a result, "the association between Apple brand and this notion of creativity is strongly held in the consumer's mind," Fitzsimons said.

The researchers recommend that advertisers and marketers use the research to help them shift advertising dollars from traditional TV ads to more "short, incidental exposures", such as Web product placement or weaving brands into the lives of characters in videos games or TV shows. Managers should also reflect more on what type of feelings they want their products to evoke in consumers and build their branding campaign around that concept, as Apple has done. "I think you'd be hard pressed to find a consumer who wouldn't like to be more creative," Fitzsimons said.


The Aging of Abercrombie & Fitch
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