Relation between Credit card usage and Materialism
IIM Rohtak Research Objectives: Dimensions Explored To study influence of material characteristics on credit card usage by analyzing : Personality Motivation Behavior of credit card ( Trait Theory ) buyers Relation between materialism and purchase/usage of credit card Self Perception Concept Materialistic Factors which influence purchase decision Factors to improve involvement with product
IIM Rohtak Research Findings By Virtue of our Research and subsequent factor analysis the following key factors related to Materialism and Credit Cards emerged : Money at Disposal Materialism Possession Social Status Credit Card Ownership
IIM Rohtak Significant Correlation Research Findings-1 Between Materialism and Usage (+) Materialistic people generally involve in higher credit card usage. “The more materialistic individuals are, the more finance charges are on those credit cards, and the more likely they are to have loans of more than than $1,000 (Watson, 2003)” Status and Usage (+) More credit card usage signifies a higher status in society “active users of credit cards are affected by key variables related to consumers’ perceptions of social status and acceptability (Medina and Chau, 1998, pp. 429-448)” Status and Credit Card Ownership Status (+) Owning a credit card signifies higher status in the society
IIM Rohtak No Significant Research Findings-2 Correlation Between Money and credit card usage Money and owning a credit card Non-materialism and owning a credit card Possessions and credit card usage Possessions and owning a credit card
IIM Rohtak Consumer Behaviour Implications Status & Credit Card Use o Social Self Concept: The students of premier B- schools want to project themselves as high status o Maslow’s Needs Hierarchy; Self Esteem: Motives oriented towards having a high status o Selective Interpretation: The students of premier B-schools, based on their interpretation, classify Credit Card Use as a stereotype for showing high status
IIM Rohtak Consumer Behaviour Implications Materialism & Credit Card Use: o Based on VALS segmentation; Strivers: Majority of students in a premier Bschool can be classified as Strivers. For Strivers, Money defines success but they don’t have enough of it to buy things to fulfill their materialistic needs. Thus they use Credit Card to fulfill their needs. o Sheth’s Consumer Motives; Functional: Since there is high materialism, there is always a want for new things. Credit Card serves as fast cash and is really helpful in impulse buying. Hence materialistic needs can be fulfilled by credit card usage. Status and Credit Card Ownership: o Cause and Effect relationship: Need for a high social status (cause) increase the desire to have the credit card (effect). It increases the involvement towards the credit card. People with higher need for social status would look for credit card with high credit limit. o Recognition with Upper Middle and Upper-Upper Social Class: Owing a credit card make the people recognize themselves with those belonging to upper- middle class and upper-upper class.
IIM Rohtak We would suggest the following to Credit Card Suggestions Companies Target materialistic people Offer credit cards to regular Target Target shoppers or those who buy above Materialistic Frequent a certain limit in a month People Flyers Shoppers Stop offers First Citizen Citibank Titanium Credit Card Aspirants of Offer credit cards to frequent Social flyers status Yatra.com offers Barclays Yatra Card and Standard Chartered Yatra Platinum cards Earn Airpoints Dollars Target customers who have high social status or aspire for higher social status to spend more Success for Credit Card using their credit card Companies !
IIM Rohtak Suggestions Target status aspirants linking them to status by owning a credit card For eg : American Express Platinum Card Travel benefits- access to airport lounges throughout the world Attend “Card Member Only” Fashion Show
IIM Rohtak Conclusion / Limitation Conclusion: Limitations: There is ample scope for Study is done on IIM students , which limits the Credit Card companies to result to be applied to target premier B-School other students. students. Although Secondary Although there is a perceived Research indicates that Risk (Credit Card Misuse) belief that Money and is associated with usage Possessions are highly but our study did not related to Credit Card usage, identify a parameter but our study establishes that connected with risk; they are of less significance. probably b,coz of inadequacy of sample.