Consumers’ Stock Preferences Beyond Expected Financial Returns: The Influence of Product and Brand Evaluations

International Journal of Bank Marketing, Vol. 28, No. 3, pp. 193-221, 2010

43 Pages Posted: 8 Sep 2010

See all articles by Jaakko Aspara

Jaakko Aspara

Hanken School of Economics; Aalto University School of Business (formerly known as Helsinki School of Economics)

Henrikki Tikkanen

Aalto University - Department of Marketing and Management

Date Written: August 30, 2010

Abstract

Purpose: The purpose of the article is to examine the links between individual investors’ subjective evaluations of certain companies’ products and brands, on one hand, and their willingness and decisions to invest in those companies’ stocks, on the other. The authors challenge the traditional assumption that individuals would make stock investment decisions purely on the basis of expected financial returns and risks.

Design/methodology/approach: Survey data was collected from 293 individuals who invest in the stock market of a European country and analyzed with PLS path modeling.

Findings: In the clear majority of the consumers’ stock investment decisions that were analyzed, the consumers exhibited some willingness to invest in a chosen stock beyond its expected financial returns/risk. Two variables are found to elicit willingness to invest in a company’s stock beyond its financial returns: (1) the personal relevance that the individual attaches to domains (activities or areas of interest; ideas or ideals) supported or represented by the company's products and (2) the individual’s affective evaluation of the company's product brand.

Research limitations/implications: Replicating the study with different companies from different industries and with consumers from different countries will be important. Overcoming a potential retrospection bias in the reported study is also a task for further research.

Practical implications: The findings provide insights that can serve segmentation, targeting, and positioning when it comes to marketing a company in the stock market so as to attract investors.

Originality/value: The article provides new evidence on the influence of product and brand evaluations in consumers’ stock investment decisions – suggesting that positive product evaluations elicit extra willingness to invest in a company’s stock, over and beyond its financial returns.

Keywords: Affect, Attitude, Personal Relevance, Product Domain, Brand, Individual Investors, Investment Behavior, Financial Returns

Suggested Citation

Aspara, Jaakko and Tikkanen, Henrikki, Consumers’ Stock Preferences Beyond Expected Financial Returns: The Influence of Product and Brand Evaluations (August 30, 2010). International Journal of Bank Marketing, Vol. 28, No. 3, pp. 193-221, 2010, Available at SSRN: https://ssrn.com/abstract=1673297

Jaakko Aspara (Contact Author)

Hanken School of Economics ( email )

P.O. Box 479
Helsinki, Helsinki 00101
Finland

Aalto University School of Business (formerly known as Helsinki School of Economics) ( email )

P.O. Box 21230
Helsinki, 00076
Finland

Henrikki Tikkanen

Aalto University - Department of Marketing and Management ( email )

P.O. Box 1210
Helsinki, FIN-00101
Finland

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