International Journal of Bank Marketing

Financial attitude based segmentation of women in India: an exploratory study

Ratna Achuta Paluri Saloni Mehra
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Ratna Achuta Paluri Saloni Mehra , (2016),"Financial attitude based segmentation of women in India:
an exploratory study", International Journal of Bank Marketing, Vol. 34 Iss 5 pp. 670 - 689
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IJBM
34,5
Financial attitude based
segmentation of women in
India: an exploratory study
670 Ratna Achuta Paluri
Received 13 May 2015
Symbiosis Institute of Operations Management, Nashik, India, and
Revised 26 October 2015 Saloni Mehra
13 November 2015
4 December 2015 JDC Bytco Institute of Management Studies and Research, Nashik, India
Accepted 4 December 2015

Abstract
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Purpose – The purpose of this paper is to identify factors influencing the financial attitudes of Indian
women and then classifying Indian women based on these attitudes. These clusters are then studied
for their characteristics.
Design/methodology/approach – Literature reviewed led to the identification of variables
influencing financial attitude of women. Nine of these variables (anxiety, interest in financial issues,
intuitive decisions, precautionary saving, free spending, materialistic and fatalistic attitude, propensity to
plan for long and short-term financial goals) were put through confirmatory factor analysis. These
factors were then used as a basis for cluster analysis. The study was conducted in the city of Nashik,
India, in 2014-2015, using convenience sampling. A self-reported questionnaire was used for the survey.
Findings – Results of the study showed that only a third of the respondents did not buy any financial
products. The most preferred financial products of Indian women were fixed deposits and insurance
policies. Four clusters of women were identified, based on their financial attitudes – judicious
consumers, conservative consumers, acquisitive consumers, unsure consumers. An analysis of the
dispersion of the clusters shows that interest in financial issues has the greatest influence in the
formation of clusters followed by the propensity to plan and materialistic attitude. Fatalistic attitude
had the least influence in the formation of clusters.
Research limitations/implications – The current study uses convenience sampling which is
non-probability-based sampling and hence, lack generalizability of results. The sample for the current
study is small, given the resource availability of the researcher and the unwillingness of women to
participate in the survey.
Practical implications – The paper provides important insights for the marketers of financial
services, in understanding the women consumers in the expanding Indian market.
Social implications – An understanding of the women consumers would help marketers develop
products and financial literacy programs that suit the requirements of each specific group. By doing so
the programs and communcation would be more effective.
Originality/value – This paper discusses the financial attitudes and behavior of Indian women and
further clusters these women based on their financial attitudes.
Keywords Consumer behaviour, Women, Consumer attitudes, Financial services, Cluster analysis
Paper type Research paper

International Journal of Bank
Marketing
Vol. 34 No. 5, 2016
pp. 670-689
© Emerald Group Publishing Limited
0265-2323
DOI 10.1108/IJBM-05-2015-0073
Introduction
Women are said to face financial challenges such as the need to build financial resources
while performing multiple roles throughout their lives, as well as managing financial
resources over a long period of time due to their longevity (Montalto, 2004). Similar to
previous research on consumption of financial services by women by
Burton (1995) in Britain, there are three reasons for choosing women as the central
point of discussion in the current study. First, changes are evident in the decision
behavior of women, due to their increased participation in family financial decisions.
 Second, significant differences exist in financial behavior of men and women. Third, there Financial
is growing interest in women as a marketing segment by financial institutions in India. attitude based
In 2013, the Nielsen Consulting Group conducted a survey on behalf of DSP Black
Rock Mutual Fund, on Indian women with ages between 21 and 60 years, across 14 tier
segmentation
I and tier II cities, involving approximately 4,800 women. The study aimed to of women
understand women’s attitudes toward financial products and found that women are not
the prime investment decision makers. About one-third of the women surveyed were 671
employed and 23 percent of these employed women were the sole investment decision
makers. Despite handling responsibilities at their workplace, women depended on
parents, their spouse, other family members, friends and financial advisers while
making financial decisions. Women were found to invest mainly in bank deposits, life
insurance, gold and post office deposits, given their risk averse nature. This study was
reported in various national dailies such as Times of India and Livemint. Another study
conducted in Ludhiana district in Punjab, India, found a 30 percent male dominance
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while only a 6 percent female dominance for financial decisions (Aujla et al., 2000).
The recent socio-economic changes in the country such as, increased urbanization,
shrinking family sizes, an increased female presence in the workforce, increasing
financial independence of women and more, are leading to an increased participation of
women in financial decision making. They are emerging as a niche within the financial
services sector. Programs and services are being specifically designed and targeted at
women. Huge opportunities exist for financial service providers who understand the
differences in how women think and act. But, little research exists on women as a
market segment that has a focus on their specific financial attitudes in India. As
competition increases, financial product providers will focus on customer relationships
and customer retention. For doing so they need to gain an understanding of the
attitudes and behavior of female consumers.
By segmenting the female market, managers can gain greater understanding of
these segments and their needs. These premises have led to the following research
questions:
RQ1. How frequently do Indian women purchase financial products?
RQ2. What are the products preferred by Indian women for investment?
RQ3. What are the financial attitudes of Indian women?
RQ4. Can Indian women be clustered into market segments, based on their financial
attitudes?
RQ5. What are the distinct characteristics of Indian women in each of these
clusters?
The study proceeds as follows. The relevant literature is reviewed and reported in the
second section, while the third section discusses the methodology adopted in the study.
The fourth section presents the analysis of the data, while the fifth section concludes
with a discussion on the managerial implications and scope for further research.

Literature review
Models were constructed so psychologists could explain the relationship between
attitude and behavior. Ajzen and Fishbein (1977), in their discussion on theory of
planned behavior, state that attitudes toward behavior are determined by their beliefs
about the behavior, where beliefs are the subjective probability that the behavior will
 IJBM produce a certain outcome. Attitudes do not directly determine behavior; rather they
34,5 influence behavioral intentions which in turn shape our actions. The determinants of
any behavior are the behavioral beliefs concerning their consequences and normative
beliefs concerning the prescriptions of others’ (Ajzen and Fishbein, 1980). It is argued
that attitude toward money and finance would affect the behavior of an individual
toward savings, borrowings and risk-taking (Agarwalla et al., 2013). Other research
672 indicates that, attitudes are relatively good predictors of general behavioral likelihoods
(Eagly and Chaiken, 1993). This paper focusses on the attitudes and behavior of women
toward financial products.

Financial attitude
Attitudes are the evaluation of ideas, event, objects or people. They help in
understanding and predicting the behavior of customers in different situations (Sethi,
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2002). Few studies (Godwin, 1994; Chen and Volpe, 1998) are reported on financial
attitudes. Tsui-Yii and Sheng-Chen (2014) discuss the determinants for financial
attitude of a consumer as – power prestige, retention, anxiety achievement and respect.
OECD developed a scale to measure the financial attitude of individuals based on the
individual’s extent of belief in planning, propensity to save and propensity to consume.
In another study, Funfgeld and Wang (2009) identified five underlying dimensions of
financial attitudes and behavior of consumers in the German speaking region of
Switzerland. These dimensions were anxiety, interests in financial issues, decision
styles, need for precautionary saving and spending tendency. Some factors influencing
financial attitude used in the study are presented next.
Factors influencing financial attitude. Anxiety. A study investigating the extent to
which people make financial decisions on the basis of specific emotions such as anger
and anxiety was made. It predicted that anger is associated with the decision to invest,
whereas anxiety motivates individuals to avoid investments (Gambetti and Giusberti,
2012). Anxiety influences people to take risks and have confidence in their ability to
evaluate investment options (Kuhnen and Knutson, 2011). Anxiety predicts
conservative financial decisions and is associated with decisions not to invest in
savings but instead to hold interest-bearing accounts and with low predictability of
stock trends. Women may be more anxious about their finances and other finance-
related matters (Lim et al., 2013).
Interest in financial issues. Knowledge and understanding of financial concepts
and products influence financial attitude. Strong positive association between
financial literacy and net worth were observed in the context of households (van Rooij
et al., 2012). Financial education can stimulate savings (Bernheim and Garrett, 2003;
Duflo and Saez, 2003). Studies suggest that women are aware of their lack of
knowledge (OECD/International Network on Financial Education (INFE) data[1]).
Women’s self-reported levels of financial knowledge are lower than that of men in
Germany, Netherlands and the USA (Bucher-Koenen et al., 2012). Lesser knowledge
can be related to lack of interest in financial issues. A study by Australian
Government and Financial Literacy Foundation (2008) revealed that women were
unwilling to learn more about everyday money management issues. Thus, women
were more likely to find money stressful. However, it is a general observation that
women look for help on financial matters.
Need for precautionary saving. Savings refers to refraining from consumption
during one period in favor of the possibility of consumption at a later period. The effect
 of uncertainty on wealth accumulation is consistent with the theory of precautionary Financial
saving but explained only a small fraction of saving (Guiso et al., 1992). Savings attitude based
relieves future-related anxiety and provides people with a sense of control over their
fate (Zaleskiewicz et al., 2013).
segmentation
Free spending. Free spending refers to the preference of individuals toward of women
spending today against saving for the future. Women are less frugal and seek
immediate gratification through spending. They are more fearful of negotiating large 673
purchases and more self-deprecatory of their financial behavior (Burton, 1995).
Propensity to plan for money in the short run and the long run. Propensity to plan
for money for the long run and short run reflects individual difference in frequency of
planning goals. Little difference is observed for people planning for money for the short
run and long run (Lynch et al., 2010). According to the results of OECD INFE survey
conducted across countries, if individuals prefer to prioritize short-term wants, then
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they are unlikely to provide themselves with emergency savings or make longer term
financial plans. Individuals decide on how much to save based on their understanding
of how their current savings affect their future. Philp et al. (1992), in their study in the
USA, state that women are more conservative investors than men; are less willing to
commit their savings over long periods of time and are less likely than men to purchase
investments which have a highly variable rate of return.
Intuitive decisions. Decision-making research dichotomizes between either cognitive
processes or intuitive processes. Intuitive decisions of individuals refer to the non-sequential
information processing or decisions that are made spontaneously. Intuitive behavior lowers
the risk-adjusted performance of financially literate individuals (Glaser and Walther, 2014).
Individuals making intuitive decisions tend to trust inspiration and prefer to be general and
figurative (Pompian and Longo, 2005).
Fatalism. Fatalism is referred to as an individual’s perceived lack of control over
his/her life’s future outcomes. Findings of the study by Shapiro and Wu (2011), state
that fatalism decreases the savings of moderately risk averse individuals, but
actually increases savings of highly risk averse individuals. Further, they state that
fatalism decreases effort in learning about savings and investment options.
They state that the effect of fatalism on actual savings depends on risk preferences
of individuals.
Materialistic attitudes. Materialistic attitude is defined as orientations emphasizing
possessions and money for personal happiness and social progress (Moschis and
Churchill, 1978). Women may be more willing to share their time and material
possessions, than money (Lim et al., 2013).

Financial behavior
Attitude toward finance or money plays an important role in determining an
individual’s ability to manage his finances and level of financial well-being (Shim et al.,
2009). Studies have identified motivational differences between the two genders in
terms of their financial behavior. Gender differences in the frequency of complaining
have been established by Burton (1995). Investigating the factors influencing
investment intentions of consumers, Lim et al. (2013) state that product knowledge and
product involvement had the greatest impact on intention to invest. Poor financial
attitude could also lead to less desirable behavior. Achievement of financial success
can be explained by a combination of an individual’s personality characteristics and
socio-economic background (Grable, 2000).
 IJBM Segmenting the market
34,5 Wendell Smith (1956) first introduced the concept of market segmentation. “It refers
to dividing a market into smaller groups of buyers who have distinct needs,
characteristics, or behaviors and who might require separate products or marketing
mixes” (Charles et al., 2003). Segmentation recognizes that consumers differ in the price
they pay, the range of benefits they expect from the product/service and its delivery
674 method. Markets can be segmented based on demographic, geographic, socio-economic
and psychographic characteristics.
Demographic segmentation has been widely used for financial products. But, the
psychographic segmentation of markets provides higher accuracy in predicting buyer
behavior compared to other bases of segmentation. Psychographic characteristics refer to
preferences, attitudes, beliefs, knowledge, personality and interests. There is increasing
literature on the use of psychographic segmentation for financial services. Harrison (1994)
used psychographic segmentation employing variables such as – individuals’ perceived
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knowledge, understanding of financial services, ability to deal with financial matters and
involvement in financial services for the banking customers. His study revealed four
segments – financially confused, apathetic minimalists, cautious investors and capital
accumulators. In another study, Machauer and Morgner (2001) used benefit segmentation
and identified four clusters – transaction oriented; generally interested; service oriented
and technology opposed; for banking customers. Hiziroglu (2013) segment the customers
based on purchasing behaviors of customers such as recency of use, frequency and
monetary values, using artificial neural networks and fuzzy logic. Need or benefit-based
segmentation may be an appropriate method for segmenting customers for financial
services (Minhas and Jacobs, 1996). However, given the low level of participation of
women in financial decisions in India, a study to segment the women consumers based on
their psychographic characteristics was found to be appropriate.
Financial motives, financial literacy and financial attitude, influence financial
behavior of an individual and could be chosen as variables for segmenting the market
for financial products. Financial motives refer to the reasons for buying financial
products. Financial literacy provides skills that help people make financial decisions
effectively (Huston, 2010). Financial attitude of an individual refers to the personal
disposition toward financial matters. This study focusses on the financial attitudes of
the women as a basis for segmentation.

Methodology
Research design
A self-administered questionnaire was designed for collecting the data required for the
study. First, interviews on financial behavior of women from different strata of society
including students, employed and unemployed women provided insights on the items
to be included in the questionnaire. The main objective of these interviews was to
explore the opinions and attitudes of women toward financial products. Review of
literature coupled with the inputs from the interviews provided the initial set of items
required for the questionnaire. The questionnaire was initially pretested on 16
respondents. Based on their responses and feedback, changes were required in the
wording of three items in the questionnaire. The final questionnaire circulated for the
study incorporated these changes.
The researchers along with a group of students personally administered the
questionnaires after explaining the purpose of the survey to women who were willing
 to participate in the survey. In total, 12 students pursuing a post-graduate course in Financial
management who volunteered to assist the researchers for the study, were trained by attitude based
the by the researchers for collecting data needed for the study. The respondents
chosen for the study were women who preferably could read or understand English
segmentation
and were above 18 years of age. The research team assisted women who were not of women
proficient in reading or understanding English by interpreting the items in the
questionnaire in the local dialect wherever it was essential. For women who were 675
comfortable reading and understanding English, the questionnaires were handed
over where they were asked to return the questionnaires within the next two days.
Constant reminders were sent to these women personally over the telephone on every
second day, regarding the return of the filled questionnaire. The survey was
conducted during the period of January to March 2015 in the city of Nashik, India.
Convenience and judgmental sampling were used for this study, given the
exploratory nature of the study and the limited resources at the disposal of the
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researchers. Lee and Cheng (2006) tested the differences between convenience
sampling and random sampling in different communities from the whole population.
They found a statistically significant, however mostly unremarkable difference
between random and convenience samples. They state that with careful selection it is
possible to produce samples which are comparable to random samples.

Measurement
The structured questionnaire used for this study consisted of two sections. The first
section provided information on the financial attitudes of the respondents. The
second section provided information on: first, financial product preferences and
behavior of respondents including the reasons of purchase of financial products, past
purchase behavior, information sources of financial products/services; and second,
demographic details such as age, education level and family income. Information for
the items in first section was collected on a five-point Likert-scale. The responses for
these items were coded on a scale of 1 to 5 with “1,” representing “strongly disagree”
to “5” representing “strongly agree.” None of the questions used in the questionnaire
needed reverse coding. Items in the second section were measured by questions based
on multiple choices.

Construct description
The final construct used for the study had 52 items for the factors – anxiety, interest in
financial issues, intuitive decisions, precautionary savings, free spending, materialistic
attitudes, propensity to plan for money for the long and short run, fatalism,
demographic characteristics and financial behavior. Items for the factors – anxiety,
interest in financial issues, intuitive decisions, need for precautionary savings, free
spending were adopted from the study by Funfgeld and Wang (2009). Of the 16 items in
the original scale 15 items were adapted for the current study. Items for measuring
materialistic attitude of respondents were adapted from the previously tested scale
developed by Moschis and Churchill (1978). Five out of six items of the original scale
were chosen. The scale for the factor propensity to plan for money was adopted from
Lynch et al. (2010). The scale is a one factor uni-dimensional measure and was assessed
for reliability and validity. In total, 11 items from the scale were adopted for the current
study. Items for measuring the factor, fatalism, were adapted from the scale developed
by Shen et al. (2009). Of the 20 items in the scale, only eight items were found to be
 IJBM appropriate for the current study. Conversely, the original scale was developed for
34,5 application in health behavior. Language of the items chosen was modified to meet the
needs of the current study.

Sample profile
Table I summarizes the socio-demographic characteristics of the respondents to this
676 survey. Majority of the respondents (75 percent) were in the age group of 18-35 years,
while another 19 percent of respondents were in the age group of 36-45 years.
According to The World Factbook for 2015, the median age of India’s population was
28 years (estimated) for women, while the mean age of the respondents for the current
study was approximately 30 years. The majority of the respondents were students
(42 percent), and most of them were graduates who had quit their jobs after
accumulating two or more years of work experience with some company in order to
pursue higher studies. The 2001 Census of India, shows that only 5 percent of the
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Demographic details Cluster 1 Cluster 2 Cluster 3 Cluster 4 Total % of respondents

Age in years
18-35 25 42 25 40 132 74.58
36-45 7 7 9 10 33 18.64
46-55 1 1 3 5 10 5.65
Above 55 0 0 0 2 2 1.13
Pearson χ2 ¼ 9.535, p ¼ 0.389
Marital status
Unmarried 16 36 19 34 105 59.32
Married 16 14 16 22 68 38.42
Divorced 1 0 1 1 3 1.69
Widowed 0 0 1 0 1 0.56
Pearson χ2 ¼ 10.114, p ¼ 0.341
Monthly family income
Less than Rs 25,000 4 11 8 6 29 16.38
Bet Rs. 25,000-Rs. 1 lakh 15 16 15 22 68 38.42
Between Rs. 1-2 lakhs 5 11 8 13 37 20.9
Above Rs. 2 lakhs 9 12 6 16 43 24.29
Pearson χ2 ¼ 6.257, p ¼ 0.714
Highest education qualification
Below under graduate 2 3 1 8 14 7.91
Under graduate 7 22 8 16 53 29.94
Graduate 11 15 18 22 66 37.29
Post graduate and above 13 10 10 11 44 24.86
Pearson χ2 ¼ 15.623, p ¼ 0.075
Employment status
Student 15 21 15 25 76 42.94
Retired 2 6 6 8 22 12.43
Govt. employee 1 2 3 4 10 5.65
Self-employed 6 3 5 2 16 9.04
Private employee 7 11 4 12 34 19.21
Table I. Not employed 0 0 2 3 5 2.82
Cluster-wise Professional 2 7 2 3 14 7.91
demographic details Total 33 50 37 57 177 100
 women were graduates or higher, while in this sample, most respondents were Financial
graduates (37 percent). About 59 percent of the respondents were unmarried, while attitude based
another 38 percent were married and 2 percent were divorced or widowed. According
to the 2011 Census of India, 54.4 percent of the women are unmarried, while
segmentation
43 percent of the women are married and 2 percent of the women are divorced or of women
separated. Monthly family income of the majority of the respondents was between
Rs 25,000 and Rs 1 lakh. The majority of the respondents belonged to families with 677
smaller size, encompassing four members or less. The sample chosen for the study
has similar representation of respondents to the population of the country, on the
basis of age and marital status.

Missing data and non-response bias

The response rate was 90 percent as the questionnaires were personally administered.
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Of the 200 questionnaires circulated, 181 were returned, of which only 177 were usable
for further study. Data related to four (out of 181) respondents was deleted list-wise as
their responses were incomplete. Data missing on one item for another two respondents
each was replaced by the mean substitution method.
Survey research with high-response rates may also face non-response bias (Lohr,
1999). The non-response bias test compares the responses of the respondents of the
early stage against those of the later stage (Lambert and Harrington, 1990). A wave
analysis was conducted to check the significance of non-response bias. The data were
split into two groups. Data collected from the respondents in the first 15 days of the
study was considered as the first group (79 respondents), and the remaining
respondents were considered as the second group (98 respondents). A paired t-test was
conducted on the key variables. A χ2 test was conducted for the demographic variables
to test for significant differences between the two groups. Results showed no
significant differences between the two groups ( p W0.05) suggesting that non-response
bias is not a concern for the current study.

Normality and reliability

Normality was tested for the items that measured financial attitude. Z-score at
95 percent confidence level for skewness of the items ranged between −2.40 and 1.87,
while Z-score at 95 percent confidence level for kurtosis ranged between −2.09 and 1.19.
Only three items had Z-score for skewness below −2.00. The values for asymmetry and
kurtosis between −2 and +2 are considered acceptable in order to prove normal
univariate distribution (George and Mallery, 2010). Results show that the data are
skewed, but the skewness is low and acceptable. The data are thus, normal and can be
used for further analysis.
Reliability reflects the internal consistency of the indicators measuring a given
construct. It is measured by Cronbach’s α. The α coefficient for the 40 items was 0.776,
which suggests that the items have relatively high-internal consistency. An α value
above 0.7 is considered acceptable (Hair et al., 1998).

Analysis and findings

Kaiser-Meyer Olkin measure of sampling adequacy was 0.705 and Barlett’s test of
spherecity ( p o 0.05) for the data indicate that the data collected can be used for
exploratory factor analysis. Based on previous research, nine factors were considered
for the current study.
 IJBM Construct validity
34,5 Confirmatory factor analysis was conducted on the nine factors measuring the attitude
of women toward financial products. It showed significant factor scores (above 0.5) for
all items corresponding to the factors as seen from Table II. Factor scores were
calculated as the average score of the items under each factor. The criterion of
correlations between each item of the scale and external variables assess the construct
678 validity of a measurement item. Convergent and discriminant validity were conducted
to check for the construct validity on the lines of the research by Fornell and Larcker
(1981), showing that the instrument used for measurement is acceptable (Tables II
and III). Factors loaded on each construct had factor loadings above 0.55. The average
variance extracted for all factors was above 0.4 and scale composite reliability for the
factors was above 0.65.
The leading diagonal elements of inter-correlation matrix having 1 as an entry were
replaced with square root of AVE, for each construct (Table III). All the entries in the
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leading diagonal were greater than the entries in the same column and row, suggesting
that the construct had discriminant validity (Fornell and Larker, 1981).

Market segmentation using cluster analysis

A number of statistical tools can be applied to segment markets. Cluster analysis
helps in identifying possible homogenous subsets. These include cluster analysis,
conjoint analysis, and discriminant analysis. This study uses cluster analysis to
segment women. Formann (1984) suggests that the minimum sample size should be
2k cases, where k represents the number of variables considered for clustering. On the
contrary, studies also state that there is no rule-of-thumb on the sample size
necessary for cluster analysis (Dolnicar, 2002). A review of segmentation studies
(243 studies) reveals that half of the studies worked with samples including fewer
than 300 objects; around two-third of the studies used less than 20 variables; and
around 42 percent of the studies used psychographic criteria for segmenting
(Dolnicar, 2002).
For the current study, the factor scores were used for performing cluster analysis to
classify respondents into groups. An initial hierarchical cluster analysis followed by
K-means cluster analysis was performed for this study. A hierarchical method helps
identify the number of cluster solutions (Hair et al., 2009) and is used when the sample
size is moderate (under 300). Hierarchical cluster analysis with Ward’s linkage and
squared Euclidean distances was used to identify the number of clusters and define
group centroids. The squared Euclidean distance measure is the recommended
distance measure for the centroid and Ward’s methods of clustering. The
agglomeration schedule was used to identify the appropriate number of clusters.
Applying the stopping rule (Hair et al., 2009), a four cluster solution provided the
largest difference between the groups.
Having identified the number of clusters (four clusters), K-means method of non-
hierarchical cluster analysis was used to cluster respondents. K-means method of
clustering gives more stable clusters as it is iterative compared to the hierarchical
method of clustering (Nargundkar, 2008). A two way analysis of variance (Table IV)
conducted on the four clusters for the nine factors show that all the nine factors are
significantly different across the four clusters ( p o 0.05).
The number of respondents and the mean value of each factor for the four clusters
are given in Table V. The characteristics of the respondents in the clusters are
presented next.
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Factor Scale composite Average variance

Construct Indicator loading Variance Error reliability (SCR) extracted (AVE)

Anxiety A2 I tend to postpone financial decisions 0.610 0.37195 0.62805 0.69515 0.4379
A3 I am unsure of the jargon used by financial experts 0.555 0.30805 0.69196
A4 after taking a decision, I am anxious whether
I am right or wrong 0.796 0.63369 0.36631
Interest in IF1 I read the business section of the newspapers regularly 0.838 0.70254 0.29747 0.82528 0.70254
financial issues IF2 I like to join conversations about financial matters 0.838 0.70254 0.29747
Intuitive decisions ID1 I compare and calculate risk 0.762 0.58121 0.41879 0.73542 0.58156
ID3 I do not complain very often, even if I have a reason to do 0.763 0.5819 0.4181
Precautionary PS1 I find it hard not to have some money for a rainy day 0.717 0.51432 0.48568 0.67928 0.51432
saving PS2 to care for the future is essential for me 0.717 0.51432 0.48568
Free spending FS1 I spend money when I am unhappy or frustrated 0.769 0.59092 0.40909 0.71778 0.46174
FS2 special offers entice me to buying 0.589 0.34639 0.65361
FS3 I enjoy spending more than saving 0.669 0.44792 0.55208
Materialistic M1 it is really true that money can buy happiness 0.574 0.32898 0.67102 0.75154 0.50642
attitude M2 my dream in life is to be able to own expensive things 0.783 0.61249 0.38751
M4 money is the most important thing to consider in
choosing a job 0.760 0.5778 0.42221
Propensity to plan PPST1 I set financial goals for the next few days for what I
for short term want to achieve with my money 0.621 0.38509 0.61491 0.81946 0.43179
PPST2 I decide beforehand how my money will be used in the
next few days 0.681 0.4631 0.5369
PPST3 I actively consider the steps I need to take to stick to my
budget in the next few days 0.647 0.41909 0.58091
PPST4 I consult my budget to see how much money
I have left for 0.740 0.54799 0.45201
PPST5 I like to look to my budget for the next few days in order
to get a better view of my spending in the future 0.607 0.36854 0.63146
PPST6 it makes me feel better to have my finances planned out
in the next few days 0.638 0.40695 0.59305

(continued )
Financial

construct reliability
Factor loadings,
attitude based

of women

of variables
and AVE matrix
Table II.
679
segmentation
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34,5

680
IJBM

Table II.
Factor Scale composite Average variance
Construct Indicator loading Variance Error reliability (SCR) extracted (AVE)
Propensity to plan PPLT1 I set financial goals for the next 1 to 2 months for what I
for long term want to achieve with my money 0.760 0.57703 0.42297 0.84069 0.4704
PPLT2 I decide beforehand how my money will be used in the
next 1 to 2 months 0.565 0.31969 0.68031
PPLT3 I actively consider the steps I need to take to stick to my
budge in the next 1 to 2 months 0.750 0.56262 0.43738
PPLT4 I consult my budget to see how much money
I have left for the next 1 to 2 months 0.701 0.49181 0.50819
PPLT5 I like to look to my budget for the next 1 to 2 months in
order to get a better view of my spending in the future 0.627 0.39252 0.60749
PPLT6 It makes me feel better to have my finances planned out
in the next 1 to 2 months 0.692 0.47875 0.52125
Attitude toward F3 I will become rich when I am destined so 0.703 0.49416 0.50584 0.79857 0.44352
fatalism F4 my financial health is determined by fate 0.664 0.44076 0.55924
F5 everything that can go wrong for me does 0.665 0.44175 0.55825
F6 I often feel helpless in dealing with the problems of life 0.577 0.33276 0.66724
F7 sometimes I feel that I’m being pushed around in life 0.713 0.50819 0.49181
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Interest in Intuitive Free Materialistic Propensity to Propensity to Fatalistic

Anxiety financial decisions Precautionary spending attitude plan for short- plan for long- attitude
score issues score score savings score score score term score term score score

Anxiety score 0.662

Interest in financial issues
score −0.191* 0.838
Intuitive decisions score −0.045 0.198** 0.763
Precautionary savings score 0.139 −0.017 0.152* 0.717
Free spending score 0.281** −0.136 −0.085 −0.108 0.680
Materialistic attitude score 0.252** 0.016 0.110 0.068 0.403** 0.712
Propensity to plan for
short-term score −0.010 0.180* 0.365** 0.276** −0.159* 0.113 0.657
Propensity to plan for
long-term score 0.027 0.277** 0.367** 0.217** −0.117 0.155* 0.704** 0.686
Fatalistic attitude score 0.203** 0.094 −0.008 −0.093 0.203** 0.223** 0.040 0.181* 0.666
Notes: n ¼ 17. Pearson correlation (two-tailed). Items in italics indicate the square root of AVE of each factor. *,**Correlation significant at 0.05 and
0.01 levels, respectively
Financial
attitude based

extracted and
Average variance
Table III.
of women

correlation matrix
681
segmentation
 IJBM Cluster mean Error mean
34,5 Factors square df square df F Sig.

Anxiety score 7.470 3 0.379 173 19.71764 0.000

Interest in financial issues score 22.417 3 0.511 173 43.82742 0.000
Intuitive decisions score 9.139 3 0.512 173 17.86639 0.000
Precautionary savings score 6.637 3 0.489 173 13.57385 0.000
682 Free spending score 8.600 3 0.487 173 17.64095 0.000
Materialistic attitude score 12.311 3 0.589 173 20.91821 0.000
Propensity to plan for
short-term score 14.146 3 0.246 173 57.39826 0.000
Table IV. Propensity to plan for
Analysis of variance long-term score 13.156 3 0.305 173 43.19713 0.000
for the factors Fatalistic attitude score 5.463 3 0.448 173 12.18198 0.000
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Cluster 1 Cluster 2 Cluster 3 Cluster 4

judicious conservative acquisitive unsure
Factors consumers consumers consumers consumers

Anxiety 2.59(L) 3.59(H) 3.46(H) 3.15(N)

Interest in financial issues 3.83(H) 2.54(L) 3.91(H) 2.68(L)
Intuitive decision 3.82(H) 3.36(H) 3.50(H) 2.75(L)
Precautionary saving 3.73(H) 3.96(H) 3.96(H) 3.20(N)
Free spending 2.09(L) 2.77(N) 3.30(H) 2.84(N)
Materialistic attitude 2.53(L) 3.07(N) 3.80(H) 2.69(L)
Propensity to plan for short term 4.03(H) 3.87(H) 3.69(H) 2.84(N)
Propensity to plan for long term 3.78(H) 3.64(H) 3.57(H) 2.65(L)
Fatalistic attitude 2.37(L) 2.82(N) 3.21(H) 2.49(L)
Number of respondents in the cluster 33 50 37 57
Table V. % of the respondents in the cluster 18.64 28.25 20.90 32.20
Profiles of Notes: H, represents high-factor score; N, represents neutral factor score; L, represents low-factor
the clusters score. Factor score below 2.8 was considered as low score for the corresponding factor and factor
based on their score above 3.2 was considered as high score on the factor, while score between 2.8 and 3.2 was
financial attitudes considered as neutral

Cluster 1: judicious consumers. Women in this cluster were less anxious, which meant
they did not prefer to postpone financial decisions. They did not show any preference in
unnecessary spending. They had less fatalistic attitude and were less materialistic. They
were comfortable using financial jargon. They show interest in financial issues meaning
they are comfortable reading and discussing financial matters. They take calculated risks,
care for the future, and plan for their long- and short-term financial goals. The majority
of the respondents in this cluster bought financial products for investment purpose
(46 percent of respondents in the cluster), followed by tax saving (26 percent of respondents
in the cluster). They were conservative and spent on fixed deposits and insurance policies.
Cluster 2: conservative consumers. Women in this cluster were uncomfortable with the
use of financial jargon and were anxious on the outcome of the financial decisions taken or
preferred postponing financial decisions. They showed higher preference for taking
calculated risks; and propensity to plan for the long- and short-term financial goals. They
were neutral toward unnecessary spending, materialistic and fatalistic attitudes.
 The major reason of respondents in this cluster purchasing financial products was Financial
for investment purposes, while many of them (42 percent of respondents in the cluster) attitude based
also stated that they did not buy these products in the last six months. A quarter of the
respondents stated tax savings and quick profits as reasons for buying financial
segmentation
products. Respondents in this cluster stated that others (mainly parents) had a major of women
say in the purchase of financial products, followed by the respondents themselves or
their spouses. 683
Cluster 3: acquisitive consumers. Women in this cluster displayed the highest
fatalistic and materialistic attitudes. They were anxious about their financial decisions
and showed interest in the financial issues. They had the propensity to plan for their
short- and long-term financial goals. They had the highest score on free spending
among the four groups. This meant that they spent money when they felt unhappy or
when there were special offers. Respondents in this cluster bought and also preferred
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buying financial products purely for investment, followed by tax saving purposes.
Most of the respondents stated that they had a major say in the purchase of financial
products, followed by their husband or their parents.
Cluster 4: unsure consumers. Women in the cluster were not very were anxious,
about the outcomes of their financial decisions. Their interest in financial issues was
low and they did not make decisions comparing risk. They reported the lowest score on
the precautionary spending. They showed low propensity to plan for both the short
and long term. They showed low fatalistic and materialistic attitudes.
Women in this cluster were mostly graduates or post graduates belonging to
families having fewer adults. Respondents in the cluster considered the purchase of
financial products for investment, making quick profits or for savings for tax purposes.
The cluster had the maximum number of respondents who did not purchase
any products in the last six months. Respondents in the cluster stated that their parents
had a major say in the purchase of financial products. Major sources of information
include family members, followed by the newspapers and the internet. Banks,
insurance companies or agents were the preferred channels for the purchase of
financial products for the respondents in this cluster. They did not show any preference
for any specific channel.

Analysis of preference of respondents for financial products

Family members (35 percent), newspapers (23 percent) and the internet (23 percent)
were the major sources of information on financial products for the respondents. The
preferred channels for the purchase of financial products for the respondents were
agents (31 percent) and banks (22 percent). Majority of the respondents stated that they
did not purchase any financial product in the last six months (32 percent), while another
31 percent respondents stated they purchased fixed deposits and another 27 percent
respondents stated they purchased life insurance policies (Table VI). Among
respondents who purchased financial products, investments followed by tax savings
were the reasons for their purchase. These finding are in line with the study conducted
by Nielsen Consulting Group’s study in 2013, indicating a huge market for financial
products in the country. Another survey by BCG revealed that the attitude and
behavior of women toward money and its management changes with age and wealth.
Younger women tend to keep most of the money in traditional bank accounts
(Silverstein and Sayre, 2009b). No significant ( p W 0.05) difference was observed within
the demographic profiles of the respondents across clusters (Table I).
 IJBM Cluster 1 Cluster 2 Cluster 3 Cluster 4
34,5 judicious conservative acquisitive unsure % of
Details consumers consumers consumers consumers Total respondents

Reasons for buying financial products such as fixed deposits, insurance policies, shares, etc.
Tax savings 9 11 6 16 42 23.73
Investment purpose 16 16 13 4 49 27.68
684 Make quick profits 3 11 3 15 32 18.08
Others 2 4 3 8 17 9.60
Do not buy these products 5 16 12 14 47 26.55
Products purchased in the last six months
Fixed deposit 15 17 13 11 56 31.64
NSC, NSS, post office
savings 3 2 3 2 10 5.65
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Life insurance 8 17 14 10 49 27.68

Other insurance policies 8 9 5 4 26 14.69
Shares 2 4 2 9 17 9.60
None 8 21 6 22 57 32.20
Others 3 0 0 2 5 2.82
Person having a major say in the purchase of financial products in the family
Myself 12 11 16 17 56 31.64
Husband 15 10 10 12 47 26.55
Children 2 2 2 3 9 5.08
Others 6 30 11 27 74 41.81
Source of information on financial products
Magazines 1 3 7 1 12 6.78
Family members 14 22 10 17 63 35.59
Friends 4 8 3 8 23 12.99
Workplace/colleagues 4 8 6 7 25 14.12
Friends 1 1 5 0 7 3.95
No products purchased 3 8 4 8 23 12.99
Newspapers 11 9 8 14 42 23.73
Internet 7 16 8 10 41 23.16
Preference of channels for purchase of financial products
Mobile 0 0 6 7 13 7.34
Internet 2 4 5 9 20 11.30
Banks 12 8 10 10 40 22.60
Table VI. Insurance companies 2 8 4 10 24 13.56
Preferences of Agents/brokers/advisors 14 20 11 11 56 31.64
respondents in Do not purchase 7 17 5 12 41 23.16
different clusters Others 0 0 2 1 3 1.69

Conclusion
In their report for BCG, Silverstein and Sayre (2009a) state that financial institutions
should not miss the benefits that can be captured from the developing female economy.
With an increased participation of women in household financial decision making,
it is essential that marketers gain a better understanding of their characteristics to
have happier customers. This may call for different strategies than those used for
targeting men. Attracting all women at large may be a difficult task for marketers.
Hence, segmenting could help managers develop a marketing mix that caters to the precise
needs of each segment, providing products that the consumers need, when they need.
 This paper examines the segments among Indian women based on the differences in Financial
the levels of financial attitudes and need for financial products. An analysis of the attitude based
dispersion of the clusters (as measured by the cluster mean square) shows that interest
in financial issues has the greatest influence in the formation of clusters, which is
segmentation
followed by the propensity to plan and materialistic attitude. Fatalistic attitude had the of women
least influence in the formation of clusters (Table IV). These findings support the need
for and provide important insights for the design and delivery of financial 685
literacy programs. Across segments, family members seem to influence the financial
decisions of women. The internet is also evolving as an important source of information
for most women.

Discussion and managerial implications

This study made several contributions to the literature on financial attitudes of women.
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The unique contribution of this paper is that it segments Indian women based on their
attitudes, similar to the study by Funfgeld and Wang (2009). Despite this, it considers
more factors by keeping the Indian context in view. Segmenting women based on their
purchase behavior would be most appropriate. But given the findings from previous
studies, stating that most women do not buy financial products, and that most financial
product purchases are made for saving or tax reduction, the current study tries to dwell
into the financial attitudes that drive behavior. Attitudes may not lead to behavior, but
an understanding of the attitudes coupled with the interest shown by women on
financial issues would provide the managers with improved insights on the consumer.
Knowing whom you are targeting and what the consumer looks for in the market place
can provide an advantage (Silverstein and Sayre, 2009a). Further, effective financial
literacy programs can be designed based on the understanding of the clusters.
An examination of the clusters shows that respondents in the cluster 1 seemed more
educated, showed an interest in financial issues and were comfortable with financial
jargon. It can thus be concluded that they took informed decisions on financial product
purchase. Informing or communicating with this segment would be easier for the
marketers as they looked upon the internet and newspapers as sources of information.
Financial product/services firms can target this segment with variants of savings and
investment products initially and further cross-sell other products. These consumers
may serve as opinion leaders for the marketers.
Financial literacy programs aimed at addressing the financial anxiety of the consumers
would be essential for the second segment to get the consumers to purchase financial
products. Word of mouth would be an appropriate source for reaching consumers in this
segment, as they relied on the views of others while making financial decision.
As respondents in the third segment showed interest in financial issues, providing
them financial education would be easier and fruitful. As most respondents in cluster 4
did not purchase financial products in the last six months, and did not have a major say
in the purchase of financial products. While cluster 1 followed by cluster 3 seems to be
the most attractive for marketers, cluster 4 seems to be unattractive. Thus the findings
of this study provide strategic implications for managers. In summary, the research
questions are tabularized in Table VII.

Scope for further research and limitations

The current study uses convenience sampling, which limits the generalization
of the findings. The study was skewed slightly toward students, and was relatively
 IJBM Question
34,5 No. Research question Results

1 Do Indian women buy financial
products frequently?
686 2 What are the products preferred by
Indian women for investment?
3 What are the financial attitudes of
Indian women?
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Only 32% of the respondents stated that they did
not buy any financial product in the last six
month. It can be concluded that a majority of
women purchased financial products (Table VI)
They invested the most in fixed deposits and
insurance policies (Table VI)
Nine factors influenced the financial attitudes of
women- anxiety, interest in financial issues,
interest in financial issues, intuitive decisions,
precautionary saving, free spending, materialistic
attitude, propensity to plan for short and long
term (Table V)

4 Can Indian women be clustered based Four clusters were identified based on the
on their financial attitudes? financial attitudes of the respondents (Table V)
5 What are the distinct characteristics of Cluster 1 – judicious consumers – were low on –
Indian women in each of these clusters? anxiety, free spending, materialistic attitude and
fatalistic attitude and were interested in financial
issues, made intuitive decisions, made
precautionary saving and had the propensity to
plan for long and short term
Cluster 2 – conservative consumers – were low on
interest in financial issues, neutral toward free
spending, and materialistic attitude, and high on
propensity to plan for long-term and short-term
financial goals, took intuitive decisions and
preferred precautionary saving
Cluster 3 – acquisitive consumers – were high on
all the factors – anxiety, interest in financial
issues, ability to make intuitive decisions,
precautionary spending, free spending,
materialistic and fatalistic attitudes, and
propensity to plan for short- and long-term
financial goals
Cluster 4 – unsure consumers – were neutral
toward anxiety, precautionary saving, free
spending, propensity to plan for short-term
Table VII. financial goals. They were low on interest in
Summary of financial issues, intuitive decisions, materialistic
research questions and fatalistic attitudes and propensity to plan

a small sample. Further research can be undertaken using probability

sampling for further generalizing the results of the study on a larger sample.
While this study has identified nine dimensions for measuring the financial
attitude of respondents, other dimensions need to be explored. Demographic
characteristics other than those discussed in the current study such as the
rural/urban background, can be examined. Most of the women purchased
financial products from a motive to save. The motive of saving can be studied
in detail as Keynes states that there are eight such motives[2], which are
psychological to a large extent. Such a study can throw further light on the
behavior of women.
 Notes Financial
1. www.oecd.org/daf/fin/financial-education/TrustFund2013_OECD_INFE_Fin_Lit_and_Incl_ attitude based
SurveyResults_by_Country_and_Gender.pdf
segmentation
2. Precautionary motive, life-cycle motive, inter-temporal motive, improvement motive of women
substitution motive, improvement motive, independence motive, enterprise motive, bequest
motive and avarice motive.
687

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About the authors

Ratna Achuta Paluri is an Associate Professor at Symbiosis Institute of Operations Management,
Nashik, under the Symbiosis International University, Pune. She obtained her PhD from the
Osmania University, Hyderabad. Her research interests include marketing financial services,
consumer behavior, CSR and economics. Ratna Achuta Paluri is the corresponding author and
can be contacted at: ratna.paluri@siom.in
Saloni Mehra is an Associate Professor at JDC Bytco Institute of Management Studies and
Research, Nashik. She has completed her PhD in the area of Brand Management. She has
presented research papers at various national and international conferences. She has published
cases in European case clearing house. Her research areas are green marketing, brand
management and consumer behavior.

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