COO vs ROO: importance of the origin in customer preferences towards financial entities

Abstract

Purpose The purpose of this paper is to determine the importance that customers give to the origin attribute when selecting a financial entity compared to other features directly related to the service that these institutions provide. In addition, this study aims at analysing what level of brand origin provides a greater utility for customers in their preference structure: regional, national or foreign. Design/methodology/approach The technique of conjoint analysis is applied via a survey of 427 customers to determine customers’ preference structure when choosing a financial entity. Findings Of particular note among the main results is the great importance the respondents give to the origin of the entity, preferring regional over national or foreign institutions. The existence of three different segments of customers based on their preference structure is also a remarkable result. Research limitations/implications Place-of-origin effect is not universal. Due to this fact, the results of the studies focussed on this research topic are difficult to extrapolate to other geographical areas. Practical implications The current situation in southern Europe financial sector obliges many small financial entities to undertake mergers in order to face the stability and solvency policies established by European Central Bank. In this sense, these institutions must decide whether or not to maintain their regional brand identity. The results of this study show the appropriateness of maintaining and communicating the regional origin of the entities. These findings will contribute to guiding decision making on brand management for financial entities. Originality/value To the best of the knowledge, there is a lack of research on the place-of-origin through different levels simultaneously. This paper provides a starting point for further research about this effect in the services sector.