Doctoral student’s paper awarded by American Marketing Association

The B-School recently sat down with Samer Sarofim, a doctoral student in the marketing area. The American Marketing Association (AMA) awarded Sarofim’s paper, “Attribution of Decrease in Financial Resources: The Differential Effect of Paying Credit Card Dues on Consumer Purchasing Behavior,” with the Consumer Behavior Track, Best Paper Award at the 2016 Summer AMA Conference on Aug. 6. The conference is the AMA’s largest academic marketing conference that gathers marketing scholars from around the world.

Samer Sarofim, doctoral student

Can you explain your research in laymen’s terms?

We’re looking at how consumers behave in the marketplace, in the light of how they deal with their credit card payments. Specifically, we’re comparing what happens when consumers use their bank credit card versus store credit card to buy in a retail store like Macy’s and what happens in their subsequent purchasing behavior.

Why did you choose this particular subject?

I have a broader interest in financial decision-making, and the reason is, if you look around, you’ll find many people making less than optimal financial decisions. We, as marketing researchers, if we can find why this is happening, which is the important question to ask, then we can educate consumers to make better financial decisions, and that will impact their general welfare and well-being.

Overall, what were your findings in your research?

Simply, we found that when consumers use their store credit cards, within the card-issuing store, they tend to spend less in their subsequent visit, which is the opposite of what retailers might think of. The reason is that when they get that bill from that retail store, let’s say Macy’s, they attribute the payments that they have to the store. It would be like “oh my gosh, that store took my money,” so they’ll spend less in subsequent visit. Whereas this attribution of financial losses does not happen after paying for a store purchase on a bank card bill because the retail purchase will appear as one among many versus coming from its own separate bill.

In your opinion, what do you think sets your research apart from your competition at the American Marketing Association (AMA) awards, and also between previously conducted research?

I think that what sets it apart is how practical it is because in many cases we study theories, and we don’t do so well with connecting the theories to real business and real marketing practices. What sets it apart from previous research is that most previous research did not consider distinction between different types of credit cards. They always look at what happens when consumers use cash versus credit cards or write checks versus credit cards, but, to the best of our knowledge, looking at the effects of different types of credit cards on consumer purchasing behavior is quite novel. We’re saying not all credit cards are created equally. The store-issued credit cards are different from the bank offered credit cards, and they could have different consequences on how consumers behave in the marketplace.

Consumer behavior is integral to marketing. What were your reasons for closely studying this aspect of consumer behavior?

One reason is that we’re specialized at KU in consumer behavior. We have excellent strategy and modelers, as well. There’s a lot of consumer behavior research going on here at KU, and that’s what brought me in. I chose consumer behavior because I was really fascinated by psychology and emotions, and I worked in the industry for eight years in sales and marketing functions, so this kind of merge is something I’ve always wanted to do. I’m curious about the psychological processes and what we, as human beings, usually rely on, and what happens in the marketplace, and that’s what consumer behavior is trying to do. Borrowing and adding to the psychology literature and applying this in the marketing context are why I chose this.

As practical research, how do you see this applying into daily life?

It applies to both consumers and marketing professionals. For marketers, our research provides insights on how store credit cards and bank credit cards can lead to different purchasing behavior among consumers at retail stores. Marketers can use our findings to decided on how to design their store cards so that consumer may use them to collect rewards for loyalty purposes or use them for making payments. As for consumers, we’re trying to emphasize that from an economic point of view, they should make financial decisions that best serve their needs and budgets regardless of the payment method or the type of card they use.

Do you have any predictions, based on your research, of what the future is going to look like in terms of the credit cards and consumer behavior related to this?

I think that my research is just one step, but the future is going into more technology-based payment mechanisms, like the Apple Pay and the Google Wallet. So now we can pay without even using the cards. So we’re now adding this extra layer onto credit cards, which represents a layer on top of cash. Payment methods are getting less transparent in how we represent the actual, physical money. As we move forward in the area, I think this might create more impulsive purchases, and perhaps people will start to attribute what happens in their finances to the Apple brand itself, since they’re using the Apple Pay or to Google, since they’re using the Google Wallet.

What do you see in the KU marketing area and its advances within consumer behavior research?

I think the marketing department is really expanding on this. We’re hiring excellent faculty from very highly recognized Ph.D. programs in the country. This is pushing research way above the normal limits and helping us as Ph.D. students to get more advanced training. It enables us produce research that tackles novel ideas with practical applications. If I may speak about my adviser, Professor Chatterjee, I think he did an extraordinary job in training me in research and ensuring my well being as a Ph.D. student. That’s a quality that is very precious when found in advisors, that they take care of you as a well-rounded person as well as training you to do top-notch research. He did this very perfectly, so I want to give him credit as my mentor. Without his support, I wouldn’t be able to achieve what I’m achieving or receive such a prestigious award.

By Anna Pankiewicz