Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 753-770

MICRO CREDIT MARKETING STRATEGIES IN THE POST WAR MARKETING CONTEXT.

S.Shivany1 , T.Velnampy2, K.Kajendra3,

Abstract

Absence of research on micro credit marketing strategies which significantly contributing factor to strategic marketing, and micro credit marketing in the financial and nonprofit organizations domain, and the extant research on marketing strategies lacks in theory based frameworks that explicate what marketing strategies are appropriate for micro credit marketing in the post war marketing context. Present study explored marketing strategies for micro credit in the unique context. Using grounded theory approach, data were collected from 08 focus group discussions, and in depth interviews with different micro credit marketing organizations. This study compared the profit oriented micro credit organizations and nonprofit organizations. NVivo (version 09) software was used to manage the focus group data. Transcripts were reviewed as the data collection to identify emerging ideas and specific themes, which guided subsequent data collection efforts. To code the data, open coding and axial coding schemes were used. market orientation, ethical marketing, post war development as differentiation, Customer service in good relation, Participation in group-lending have been identified as the marketing strategies which have been adopted by the profit and nonprofit orientated organizations in the post conflict marketing context.

Keywords: Micro credit marketing, Marketing strategies, Postwar context, Grounded theory

1. INTRODUCTION additional income. Sri Lankan microcredit Microfinance is the solution that organizations become gradually aware of ensures the provision of loans and other the importance of marketing in their current basic financial services to those activities, those who have penetrate into post entrepreneurs who have limited access to the war marketing environment. banking sector. These financial services provided by microfinance institutions allow Understanding the market for small business owners to take advantage of microcredit services, and using effective their entrepreneurship skills by developing marketing tools and strategies to attract new small businesses capable of generating clients is critical if programs are serious

1University of Jaffna, [email protected] 2University of Jaffna, [email protected] 3University of Colombo, [email protected]

753 about increasing their scale and being seen It has created positive impacts on two vital as critical players on the microenterprise/ areas of national development, viz., small business development scene. alleviation of poverty and women's empowerment. Microcredit programmes in Microcredit as a business starting as post war context are targeted to the poor who a social inspiration and ending as a has returned to their normal life after 30 sustainable model for microcredit (Ray M. years of civil war. Valadez, Bruce Buskirk, 2012). Microcredit has attained rapid growth in Sri Lanka. It has Being a rural based micro finance emerged as a potent instrument of poverty providers with extension into the small alleviation. Both private and public sector business sector, micro credit organizations organisations are involved in microfinance. have been instrumental in empowering rising entrepreneurs from the grass root The development of the competitive level. Through group and individual lending environment often takes place in parallel schemes, they have targeted women, small with the market development. On emerging entrepreneurs and farmers, and become a markets, competition is very low, often pillar of financial strength in their journey nonexistent. It increases on developing towards becoming a viable business markets and is very strong on mature enterprise in the Sri Lankan Post war context markets. Once competition becomes more (LOLC, 2014). intense, microcredit organizations feel the threatened that they might lose the market Developing markets can be found share they have, and they start to invest in rural areas and small towns that have resources in marketing activities to help economic potential for development. These them maintain their market position. In markets are characterized by an increasing urban areas, the main competitors are other demand for microcredit, which is and will be microfinance institutions, banks, with the met by existing or future Microcredit consumer loans. The rural market is programs. This demand comes from existing relatively divided geographically between customers and potential customers who have microcredit organizations. Banks have just heard of the available microcredit products started to open small local offices, to shine in and see their effect on customers who have micro credit activities (Ray M. Valadez, accessed them (Ray Valadez, Bruce Buskirk, Bruce Buskirk, 2012.) 2012).

Microcredit has generated The creation of Microcredit markets considerable hope and expectations among in poor countries is a crucial factor for their the academics, policy makers of the development. If well put into practice, government, NGO leaders and other people would be able to improve their development practitioners in post war quality of life. With the suitable support they marketing environment of Sri Lanka. will become educated and that will allow

754 them to enlarge their business, to think by post war marketing context. It is an essential themselves and to appreciate that they have to explore the marketing strategies, which rights. The creation of credit markets in poor have been used to compete in the micro countries is a crucial factor for their credit marketing. development. If well implemented, people would be able to sell their products, pay a Micro credit marketing is the fair interest rate, and use the extra money to emerging phenomena, and especially in the improve their quality of life (Sofia Santos, post war context marketing strategy making 2009). is needed for post war development. So the present study is to find out the strategies of In many cases, there is only one micro credit marketing in the post war microcredit supplier operating in the area. context. This research paper is highlighting a The challenge in this situation is to develop picture of marketing strategies for micro appropriate internal systems to manage credit customers as a profitable segment for growth. Attracting customers is relatively microfinance institutions. easy and the lack of competitive environment offers these customers few Research Lacuna options, so the microcredit organization has Micro credit is a source for small a high retention rate (Florenta, Lucian business as a means for alleviating poverty Blaga, Hermann Oberth, 2012). has garnered significant attention among businesses, policy makers, and scholars in Need of the study recent years. Yet, little attention has been The need of microcredit arises given to the approach by which the poor because, the post war context requires actually seek out small scale loan to satisfy sources of finance for poverty alleviation, their basic business financial needs (Sofia procurement of agricultural and farms input Santos, 2009). and post war business development. However, there is a dearth of Micro credit is a programme to empirical knowledge to understand the support the poor rural people to pay its debt effectiveness of marketing capabilities or and maintain social and economic status in guide their development and use in micro the villages. ventures. Bruton, Ahlstrom, and Obloj (2008) suggested that much more insight is As we know that Sri Lanka is needed into the types of influence and agriculture based economy so microcredit personal selling strategies that are effective may be a tools to empower the farmers and in emerging economies. rural peoples to make business and agriculture profitable in the post war In the earlier epoch, micro credit has marketing context. been offered only by service oriented organization, and the non-government Due to the competition exists organization, but in the contemporary among the micro credit organisations in the competitive environment profit oriented

755 organization also have started to offer micro livelihood income generation activities were credit for profit as a cross selling strategy for studied (Velnampy, Kajendra, Shivany, profit earning. Non -Profit oriented 2013). There are many links between organsiations gain income from the profit of livelihood and micro credit marketing. This micro credit marketing by starting sub study contributes for building from theory in branches to market micro credit (Florenta, strategic marketing, and theories the Lucian Blaga, Hermann Oberth, 2012). marketing strategies for micro credit activities in the post war context. To that end, Need for micro credit is immense this study offers several contributions. This because many nonprofit/non-government study explores the role of marketing organizations provide training for starting capabilities in driving performance in Micro self-employment, and livelihood income credit marketing. Specifically, explore the generating activities. The people who have marketing strategies in the post war context, been trained need micro credit for starting which have been underexplored. This study new business, it created a big segment of also brings together theory from strategic micro credit (Sofia Santos, 2009). marketing and micro credit marketing that has seen minimal integration to date (Webb, For communities affected by the 2011). disaster it is a priority to protect, recovered develop the resources that they need for 2. LITERATURE REVIEW medium and long term food security, and Microfinance has been established future livelihood. In situation of conflict, as a tool to reduce poverty all around the war, disaster communities have lost their world. Many informational sources consider assets through fight and conflict, their microfinance as a mean for small business livelihood activities and access to markets support. Typical microfinance borrowers are are often seriously restricted. Micro credit low-income individuals that do not have helps them to recover their livelihood and access to formal institutions. (CGAP, 2013) small business sector as well as the farming Microfinance borrowers are typically self- (Littlefield et al., 2003). employed, often household-based entrepreneurs. In rural areas, they are The organizations who have the usually farmers, and others who are engaged capability of offering micro credit are in small income-generating activities such targeting the segment, who needs the micro as food processing and petty trade. In urban credits in the post war context. Those areas, microfinance activities are more organizations are penetrating into the post diverse and include shopkeepers, service war market to market their micro credit providers, artisans, street vendors (ibid). services. Marketing capabilities are central to business innovation and performance but Microfinance has demonstrated its are underdeveloped in the micro credit potential to assist the poor to make marketing Literatures. significant strides towards Reducing their Marketing strategies of the vulnerability, improving their livelihoods,

756 paying for basic health care and financing Marketing capabilities constitute specific their children's education (Littlefield et al., sets of knowledge for marketing products 2003). and services as well as the cognitions and frames that individuals possesses for Micro credit makes low interest relating to the market. Such capabilities loans to the poorest of the poor, people with might be particularly helpful in asset- no collateral or credit history” deprived contexts, given their applicability (Dalglish,2010) in a country ravished with for a wide range of business activity war and famine, need for the micro credit has domains, such as interpersonal selling, been doubled, and credit for self- customer service, branding, promotion, employment and other financial and pricing, distribution, segmentation, and business services (Daley-Harris, 2009). product positioning (Bloom, 2009). Microfinance institutions and their backers, w h i c h i n c l u d e b a n k s , c h a r i t i e s , Alongside other key capabilities, nongovernmental organizations (NGOs) strategists explore the role of marketing and international development institutions capabilities for driving superior such as the World Bank (Hodge, 2010) are performance (Hult and Ketchen Jr, 2001, targeting areas that will benefit from their Morgan, et al., 2009). input. Small to medium size credit operators in countryside and towns that had lost 3. METHOD OF DATA COLLECTION traditional financial structures took to Sample and data collection microcredit to fill the gap. Microcredit Data were obtained from 08 subsequently proliferated in countries with a informants using focus group discussion and paucity of bank infrastructures, such as most in-depth interviews with profit oriented of Africa, Asia, Latin America, and Eastern micro credit organizations and nonprofit Europe. In some of these countries, less than micro credit organizations. Unswerving 20 percent of the population has a bank with other marketing studies of a similar account. (Ayayi & Sene, 2010). nature (Flint et al. 2002; Kohli and Jaworski 1990; Tuli et al. 2007), this study used Microfinance, or 'micro-credit', is theoretical sampling technique to select an efficient and successful way to extend informants based their ability to provide an small-dollar loans to impoverished people in understanding of the phenomenon. hopes of encouraging community growth Theoretical sampling is a non-random and development. In the past few decades sampling scheme. Its purpose is to obtain a microfinance has become increasingly deeper understanding of the issues, and popular in third-world regions. Its influence develop explanations and theory rather than has grown and has had major societal and provide generalizations (Corbin and Strauss economic influences around the world, 2008). However, by selecting a various set of alleviating poverty in countries such as theoretically pertinent informants, the re Bangladesh, India, and Sri Lanka. searcher can see the circumstances under

757 which the developing groups grip factual code the data, open coding and axial coding (Creswell, 2007). schemes were used (Strauss and Corbin, 1998). In open coding, researchers identified Primary sources important concepts using in-vivo codes Primary data have been collected (concepts based on the actual language used through focus group discussions, as by the informants). Next the in-vivo codes qualitative method. Questions were kept were grouped into higher level concepts open ended where opinion was sought and called first-order categories, based on some the respondents have something to tell from underlying similarities between them. Next, his experience. This was done to give scope the researchers used axial coding, wherein to the respondents to express themselves searched for relationships between and freely. among the first-order categories, and assembled them into second-order themes. R e s e a r c h e r s f o l l o w e d t h e These second-order themes were used to procedures specified by Krueger and Casey understand the emergent framework (Corley (2009). During the focus group, one of the and Gioia, 2004). The strategies were co-authors played the role of a facilitator, identified in this study are Ethical facilitating the discussion and allowing marketing, small business promotion and informants to guide the discussion flow and business advice, post-war development, content. Interventions were made only to flexible repayment system, group clarify certain aspects of the discussion. formulation for credit guarantee, miniature credit amount, and self & business insurance Interviews as well as the focus for the customers. group discussion were digitally recorded, translated and transcribed. Focus groups In Table 1, in-vivo codes and data totaled approximately 37 pages. representative informant quotes for specific Toward the end of 08 focus group in-vivo codes were presented. In table 2, discussions and 04 interviews, researchers first-order categories, the second-order encountered the same themes over and over, themes, and the marketing strategies that and no new insights were emerging from the emerged from data were presented. data; a case of theoretical saturation (Strauss and Corbin 1998). Reliability and validity of analysis Based on Lincoln and Guba (1985), 4. DATA ANALYSIS and Silverman and Marvasti (2008) to Method of Data Analysis maintain data trustworthiness and QSR International's NVivo (version indemnify analytical thoroughness NVivo 09) software was used to manage the focus (version 09) software as the data group, and interview data. Transcripts were management program was used exactly reviewed as the data collection to identify maintain the informant contact records, emerging ideas and specific themes, which focus group transcripts, field notes, and guided subsequent data collection efforts. To other related documents, as they were

758 collected. interpretations of the data and the credibility of the findings. Refutability means that Proportional reduction in loss method was researchers seek to disprove the assumed used to assess the reliability of coding relationship between phenomena. By having scheme. The proportional reduction in loss a diverse sample of both field officers and for the current study was 0.81, which is well micro credit managers from different micro above the 0.70 cut-off level recommended credit strategies within different for exploratory research (Rust and Cooil, organizations, then trying to see if findings 1994). emerging in one context could be refuted in another. Most of the emergent findings were The outside researcher experienced consistent across the profit and nonprofit in qualitative methodology were asked to micro credit organizations. Constant conduct an audit of our empirical processes comparison implies that a qualitative to insure the dependability of the data. This researcher should try and find additional outside researcher went through our field cases to validate emergent findings. This notes, coding schemes, random samples of requires that the data collection and analysis focus group transcripts and documentation begin with a relatively small data set which to assess whether the conclusions reached is subsequently expanded based on the were plausible. These peer debriefing emergent categories. Data collection was processes (Corley and Gioia 2004) provided stopped when no further new findings with an opportunity to solicit critical emerged after reaching theoretical questions about data collection and analysis saturation (Strauss and Corbin 1998). procedures. These discussions also allowed Comprehensive data treatment means that to have our ideas scrutinized through other the researchers examine the data thoroughly researchers' perspectives. and comprehensively prior to drawing conclusions. Since all the interviews and To protect validity, present study focus group discussion were translated, and followed five unified procedures transcribed. The NVivo (version 09) recommended for qualitative research software was used to manage the data, and (Silverman and Marvasti, 2008): (a) inspect all data thoroughly. respondent validation, (b) refutability, (c) constant comparison, (d) comprehensive 5. DISCUSSION AND CONCLUSION data treatment, and (e) deviant-case In discussing the findings, ideas that analysis. Respondent validation, also known are insightful, were frequently mentioned by as member checks (Creswell 2007), needs informants were taken for the findings and that researchers go back to the respondents discussion of the study. Utmost poor people, to validate the findings that emerge from the in the post war context require finance for data. To do so, researchers shared the business development. Micro credit findings with the study participants and marketing strategy determines how those asked them to offer their views on our attracts customers and deals with its

759 competitors, suppliers and other institutions loyalty and reduces drop-outs and thus for survival and growth. increases profitability (Churchill and Halpern, 2001) Market orientation holds The strategies people chose as being that success will come to those organizations most viable will depend on their own skill, that best determine the perceptions, needs, culture capabilities, resource and social and wants of target markets and satisfies mechanism, as well as host community them through the design, communication, habits, custom, religious. Present study pricing, and delivery of appropriate and identified eight strategies which are adopted competitively viable offerings (Gary Woller, by the micro credit organizations in the post 2002). war marketing context, such strategies are Ethical marketing, small business In the post war marketing promotion and business advice, post-war environment, micro credit organization also development, flexible repayment system, follows the market let policies. Customers in group formulation for credit guarantee, the micro credit environment are more miniature credit amount, and self & business experienced and educated during the war. insurance for the customers. They have returned to their normal life and search for new benefits from the existing Market orientation strategy products (Shivany, 2010). Organisations Micro credit organizations are which penetrate into the post war marketing responding by seeking to better understand environment need appropriate strategies to their clients' demands and preferences and attract the customers in the post war marking thus taking a market-led approach to their environment to survive in long run (Shivany, business (Anyango, Sebtsad and Cohen, 2011). 2002). The development of a more client- responsive, market-led approach to We always think of market and its Microfinance is an important crunch in an changes….post war marking environment is industry before largely dominated by the unique….we are in a position to serve Sri misconception that simple replication of Lankan developing economy by offering successful models could achieve massive micro credit to the rural areas……..we and sustainable scale worldwide. Ironically periodically assess the needs of the segments it is the success of the “first wave” finance and change the micro credit features… for the poor schemes…that is the greatest Periodically, their suggestions are obstacle to future experimentation (Rogaly, welcomed and service modification are 1996). made, at the time of loan approval we provide business development advises and There are many benefits in doing self-insurance as well as business this for both the organizations and their insurances………………” clients. For the micro credit organizations a market-led approach enhances customer Customer service in good relation

760 Customer service is a key focus on the client. In doing so, it creates determinant of client satisfaction and exchanges that satisfy individual and loyalty. It is one of the aspects of micro credit organizational goals (Kotler, 1999). operations that is relatively easy and low- cost to improve upon. And yet few micro Service business increasingly credit organizations have focused on recognize the important of stable customer understanding and improving customer relationship and focus on enhancing the service in a systematic manner. Research overall customer experience (Humburg, et undertaken by South African micro credit al, 2009). One of the service recovery organisations highlights the extensive strategies is customer orientation, to address influence of the word of mouth effect on customer marketer interaction from generating sales (Graham Wright, David customer perspectives. This strategy focus Cracknell, Leonard Mutesasira and Rob on proactive approaches to break down the Hudson, 2003). Velnampy, Kajendra, services occurred in delivery. The customer Shivany, (2013) identified that customer orientation of customer contacts is very service and customer relationship are important in service business (Martin Bush, important aspects in the marketing strategies 2006). for Livelihood income generating activities, which needs micro credits in the post war M i c r o c r e d i t m a r k e t i n g marketing environment. organizations focus on customer expectation. Periodically service feedbacks In East Africa the top management are collected and fine-tuned based on the of micro credit organisations reviewed all suggestions made by the customers, about appreciate the reliance of word of mouth the loan amount, repayment, service staff, promotion on sales and as such most and their future expectations. endeavor to achieve differentiation through customer service performance. Yet few of “We always concerns with the these players had any formal customer benefits of the customer and search for a service strategy or staff training policy at feedbacks………we never treat them as time of review (Hudson and Mutesasira, creditors of our organsiations….our field 2002). staff has good relations with them ….they all know about the family of our customers and Marketing attempts to understand their difficulties…we have flexible the needs of the client and to adapt repayment system and ….cost effective operations in order to meet those needs and interest rate…..we have good positioning in achieve greater sustainability. It addresses rural areas. the issues of new product development, pricing, the location of operations and the Post war Development as differentiation promotion of the institution and its products. T h e d e v e l o p m e n t a n d Marketing is a comprehensive field aimed at differentiation of products is a process of strengthening the institution by maintaining continually and systematically assessing

761 Needs of the market and its different Customers of the organizations are effected segments to support product development by the war, therefore the micro credit and innovation that caters for those needs in providers are supposed to have a good the most feasible and profitable manner. In manner, not to hurt the people in the war particular micro credit organisations are effected areas. The organizations and the looking for Opportunities that are not staff of them, which had unethical behavior oversupplied from a competitive in repaying micro credit loosed their market perspective. Kotler (1999) identifies nine share, and profit. ways to build demand, depending on the nature of the market and the product being Whysall (2000) looks at ethical sold by the organization. issues such low prices to customers, selling products made in sweatshops, offensive Present study identified that the advertising, development of out-of-town micro credit organsiations in the post war outlets, and copy-cat branding. All of these marketing environment follows the require balancing interests of some of the development and differentiation strategy. stakeholders (Mitroff, 1983). However, in Post war areas need development, small managers would suffer from time business and self-employment are the constraints and bonded rationality to study crucial sources for the redevelopment of the what is happening in the mind of each and affected areas. Women headed families and every individual. Therefore, some kind of individuals who loosed the assets during war superficiality and aggregation is necessary have to redevelop their business capabilities, for management decision making. for that they need credits. Micro credit organizations in the post war environment From the discussions researchers more concerns on the redevelopment, when could understand that the organization they select the clients for giving micro credit which have the orientation toward small their preference is redeveloping society. business promotion and giving business advices to the livelihood business activities We serve people by differentiating in the post war marketing environment have some aspects in micro credit. Interest succeeded and those who haven't rate…modicum amount of micro considered this business promotion and credit…….staff training as well as our first business advises were failed differentiation base is post war development , therefore we are supported by government Micro credit organizations policies as well as foreign funds. expressed that thy have been adopting Flexible repayment system for managing Ethical marketing repayment schedule. This strategy allow The micro credit organization them to survive in the market and gain expressed they consider Ethical marketing. sustainable advantages. In the micro credit marketing they always think of ethical issues in repayment system. Livelihood income generation

762 activities in the post war marketing context social inclusion. The group-lending model were started by the community based of microcredit is a development intervention organizations. Therefore they are more in which small-scale credit for income- concern on the profit making through generation activities is provided to groups of serving community. Therefore the micro individuals who do not have material credit organizations also show that they are collateral (Anna schurmman, Heidi Bart concern on community through serving the Johnston, 2009). customers who needs micro credit to serve the community. Group liability in microcredit purports to improve repayment rates through We are concern on our customers…. peer screening, Monitoring, and and adopt ethical marketing practices…our enforcement Group liability is often cited as customers were affected by the war and the a key innovation responsible for the displacement…now they have returned to expansion of access to credit for the poor in the normal live to live…..they all dislike developing countries (Morduch 1999; unethical behavior in business….therefore Armendariz de Aghion and Morduch 2005; we are very keen in ethical aspects when Daley-Harris 2009). The group meetings doing micro credit marketing… have also been shown to be beneficial in theory (Rai and Sjostrom, 2010) and in Participation in group-lending practice (Feigenberg et al., 2010). Ghatak Non- government organizations, and Guinnane (1999) summarize the and other micro credit organizations literature on joint liability by identifying formulate group in the villages through that four channels through which this contract they secure their credit and Group feature can help institutions improve formulation for credit guarantee. The repayment discovery of the joint liability method was very important since it can also reduce Formulating groups in the villages expected audit costs and improve efficiency help us to manage micro credit recovery. (Ghatak et al, 1998). Stiglitz (1990) T h r o u g h f o r m i n g s m a l l g r o u p s developed a model in which the lender offers ……responsibility is delegated to the group a contract to a group of two neighbors and members. Leader handles all repayments on each should monitor the kind of project that behalf of us… there is a motivation as a the other is implementing. Basley and Coate discount to the leader who had did his/her (1995) argue that the key feature of group job best. lending is joint liability. They model the borrowers' behavior by specifying a Limitations of the study repayment game in order to analyze the Due to paucity of time and other borrowers' willingness to pay after some set resources as an academic researcher, the of project returns has been realized study was limited to 08 micro credit Participation in group-lending organizations in one districts. The reduces health inequities through promoting investigation was based on the information

763 collected from 08 micro credit organizations services to the customers. Post war context is including non-governmentorganizations, unique some micro credit organizations are commercials banks, Government owned penetrating into that context, some of them financial organizations, non-bank financial are targeting this market via market organization in Jaffna district Hence, the development strategy in to the new market findings has been made based on the sample searching for new segments. study. The microfinance industry is at a Micro credit marketing is an crucial stage of its evolution: it is coming of emerging phenomenon therefore more age. For a long time, microfinance has been unpublished data are available than the moving beyond “credit for enterprise” to published data. There were some encompass “financial services to reduce communication barriers and some ideas may vulnerability and to improve livelihoods”. be expressed without understanding. Some With the international community's focus on had taken a great deal of time to give details. the Millennium Development Goals this Some will express details vaguely. Some of shift in the scope of microfinance is both them avoided to answer the questions. timely and essential.

Conclusion The transition to a market-led Post war marketing environment is approach to microcredit often starts with exclusive in nature. Customers in this relatively modest product Development, but environment are unique on their those micro credit organizations seriously characteristics and behavior. Micro credit committed to this soon find that a market marketing is an emerging phenomenon in orientation requires long-term and developing country as a strategic tool for fundamental changes in approach, mind-set reducing poverty. In the post war context and systems of almost every part of their poor people who had loosed their assets and business livelihood need credit to redevelop their small business. In the contemporary Community based, government and business environment not only the nonprofit non-government organization in the post organizations but also the profit oriented war environment offer micro credit to the organizations have developed micro credit people to start small business for their marketing as a survival product for profit livelihood development. In the post war earning. marketing environment profit oriented organizations, those who offer the micro In any business, if there are more credit have to compete with the micro credit competition, each and every body need organizations which have come to penetrate strategy. Marketing is satisfying customer the market. Marketing strategies are adopted needs by differentiating, what they market. to overcome the problems in the market In that line micro credit marketing needs places to earn profit and survival. Therefore strategy for differentiating their financial it is essential for micro credit organizations,

764 to adopt marketing strategies for doing their Micro credit organizations business better. Present study found that the continually struggle to communicate micro credit organizations which succeeded effectively with their clients and markets in market have adopted market orientation, (Cracknell et al., 2002) thus losing ethical marketing, post war development as opportunities to retain and serve existing differentiation, Customer service in good clients as well as attract new ones. Selling relation, Participation in group-lending. products and, in increasingly competitive environments, branding is also essential Present study focused on to getting both for the sustainability as well as insights of the related staff of the micro empowering poor people to access the credit organizations and code their financial services of their choice. statements then identified the strategies which they have adopted. REFERENCES Armendariz de Aghion, B. and J. Morduch This study compared the micro (2005). The Economics of credit organizations which do well and Microfinance, MIT Press. which failed to attain their objectives. The micro credit organizations which have been Anderson, Kristin, and Carol Kerr. (2002) adopting marketing strategies since their C u s t o m e r r e l a t i o n s h i p commencement, do well and retaining more management, New York; Mc Grow- customers. . Market orientation, ethical Hill marketing, post war development as Anyango Ezra, Jennefer Sebstad and differentiation, Customer service in good Monique Cohen, “Assessment of relation, Participation in group-lending the the Use and Impact of MicroSave's marketing strategies which have been Market Research for MicroFinance adopted by the micro credit organisations. Toolkit”, MicroSave, Nairobi, 2002 Anna schurmman, Heidi Bart Johnston This study compared the profit (2009) the group lending model and oriented micro credit organizations and social closure, micro credit nonprofit organizations. This study e x e c u t i o n a n d h e a l t h i n identifies that nonprofit oriented BangladeshJournal of Health organizations are more flexible towards Population and Nutrition. 2009 interest rate and repayment stem than the August; 27(4): 518527. profit oriented micro credit organizations. Profit oriented micro credit organizations Bray, John. (2005) “International manage their micro credit marketing via Companies and Post -conflict adopting marketing strategies. Nonprofit Reconstruction: Cross-Sectoral micro credit organizations implementing Comparisons,” Conflict Prevent ion their micro credit for livelihood by & Reconstruction, Paper No. 22, managing group formulation and post war International Alert. development.

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766 Economics 60 (October 1999): 195- LOLC (2014) Micro Credit Ltd accesses on 228. 2014/01/01http://www.lolcmicrocr Hudson, Rob and Leonard Mutesasira, “A edit.com/aboutus.php Review of MFI Marketing Mills, Rob and Qimiao Fan.(2007) “The Strategies and Activities”, Investment Climate in Post - MicroSave, Nairobi, 2002 Conflict Situations, ” World Bank Hooley, G., Piercy, N.F. and Nicoulaud, B. Policy Research Working Paper (2008). Marketing Strategy and 4055, World Bank Institute,. Competitive Positioning. 4th USAID Economic Growth Off ice Edition. Pearson Prentice Hall, Miles, R. E. & Snow, C. C. (1978) United Kingdom. Organizational Strategy, Structure, Josephs, J (2008). Market research in the and Process. New York: McGraw- new marketing strategy paradigm, Hill. published by directed marketing M a r t i n C . A . , & B u s h , A . J association Library, January 2008. (2006).psychological climate, Kohli, A. K., & Jaworski, B. J. (1990). empowerment, leadership style, and Market orientation: the construct, customer oriented selling; an research propositions, and analysis of the sales manager-sales managerial implications. Journal of person dyad. Journal of Academy Marketing, 54(04), marketing science, 34(3), 419-439. Krueger, R. A., & Casey, M. A. (2009). Mitroff, I. I. (1983). Archetypal Social Focus groupsa practical guide for Systems Analysis: On the Deeper applied research (4th ed.). Los Structure of Human Systems. Angeles, CA: Sage. Academy of Management Review, Lincoln, Y. S., & Guba, E. E. (1985). 8(3), 387-397. Naturalistic inquiry. Beverly Hills, Morduch, J. (1999). The Microfinance CA: Sage. Promise. Journal of Economic Leonard Mutesasira, David Cracknell,Rob Literature, 37(4), 1569-1614. Hudson, Graham A.N. Wright (2004) Strategic Marketing for “Microfinance industry,” Consultative Micro Finance Institutions micro group to assist the poorest (CGAP), serve publication January 06, 2004 f r o m t h e w e b s i t e http://www.cgap.org/html/mi_faq Littlefield, Elizabeth, Jonathan Morduch .html accessed on 12/11/2013. and Syed Hashemi,(2003) “Is Microfinance an Effective Strategy Pradeep Kashyap (2012) Rural Marketing, t o R e a c h t h e M i l l e n n i u m second edition, Pearson education Development Goals?”, CGAP publication. Focus Note (forthcoming).

767 Rai, A. and T. Sjostrom (2004). "Is Grameen Environment: Grounded Theory Lending Efficient? Repayment Approach, marketing information Incentives and Insurance in Village a n d s t r a t e g i e s : c o r e f o r Economies." Review of Economic development, (pages281-286) Studies 71(1): 217-234. C o n f e r e n c e p r o c e e d i n g s , Rogaly B., “Micro-finance Evangelism, Annamalai University, SCITECH “Destitute Women”, and the Hard publication (India). Selling of a New Anti-Poverty S h i v a n y, S . ( 2 0 11 ) . P r o m i n e n c e o f Formula”, Development in information bases & media Practice, Volume 6, Number 2, UK, assessment in the post conflict 1996 m a r k e t i n g e n v i r o n m e n t , Sofia Santos (2009).market solutions in ACADEMICIA An International poverty: the role of microcredit in Multidisciplinary Research Journal, development countries with published by south Asian research financial restrictions School of journals,2(6), June 2012. Economics and Management ISSN Tuli, K. R., Kohli, A. K., & Bharadwaj, S. G. Nº 0874-4548 (2007). Rethinking customer Stliglitz, J. (1990): Peer Monitoring and solutions: from product bundles to Credit Markets, The World Bank relational processes. Journal of Economic Review. Marketing, 71(07), 1 Silverman, D., & Marvasti, A. (2008). Doing UNDP (2000), Sustainable Livelihood q u a l i t a t i v e r e s e a r c h : a Overview. comprehensive guide. Thousand Velnampy.T, Kajendra, K, and Shivany, S Oaks, CA: Sage. (2013), Marketing strategies for the Strauss, A., & Corbin, J. (1990). Basics of livelihood income generating activities in the post war marketing qualitative research. Newbury Park, th CA: Sage. context, proceedings of the 9 international conference on Strauss, A., & Corbin, J. (1997). Grounded business management, turning theory in practice. Thousand Oaks, crisis into opportunities: meeting CA: Sage. the unmet ICBM 2012Welman, C, Steffes EM., Burgee, LE (2009), social ties Kruger, F, and Mitchell, B 2005. and online word of mouth, internet Research methodology. Cape Town: research 19(1)41-59. Oxford University Press. Strauss, A., & Corbin, J. (1998). Basics of Wallman, S., 1984, Eight London qualitative research: Techniques households, London Tavistock. and procedures for developing Whysall, P. (2000). Addressing ethical grounded theory. Thousand Oaks, issues in retailing: a stakeholder CA: Sage. perspective. International Review Shivany, S (2011), Exploring the pattern of of Retail, Distribution & Consumer Consumer Brand Choices in the Research, 10(3), 305-318. P o s t - C o n f l i c t M a r k e t i n g

768

Table 01: in vivo codes: representative quotes

In vivo codes Representative quotes Market orientation Responding by seeking to better understand our clients’ demands and preferences and thus taking a market -led approach to our business…………….it determines the perceptions, needs, and wants of target markets and satisfies th em through the design, communication, pricing, and delivery of appropriate and competitively viable offerings Ethical marketing, We ever think of the micro credit interest rate, because our customers are returned to their habitual life after war and search for affordable price, We always think of the mind of the customers where we serve. All are very poor and had bad experience from war…therefore we always deal with friendly ma nner… We share everything with the customers they talk long minutes after the credit offered…legal aspects are shared among the group members …if the legal thing is

unethical we redesign our credit package. Post-war development, We entered to offer credit for benefiting customers who have come as different iation to restart their life/work therefore……. first preference we considered redeveloping the affected areas, the theme of war affected communities and their life returning ……by differentiating , staff training, interest rate….development of post war economy is our first preference

Customer service in We talk with our customers for a minutes and get their feedbacks on good relation, the service delivery, and to know whether they have satisfied or not. ….if they are not satisfied we ask the reason of that…..some time they really tell the reason and sometime not, but we contact them in other meeting and verify the reasons of dissatisfaction based on the reasons they tell us we actually change our service and the items what we are delivering……… Participation in group- We ……….formulate group in the villages through that they secure lending their credit and Group formulatio n for credit guarantee. The discovery of the joint liability method is very important since it can also reduce expected audit costs and improve efficiency. In our micro credit marketing…… sharing responsibility is an adv antages in credit recovery

Source: Author constructed

769 Table 2: Examples of in-vivo codes, first-order categories and second-order themes

In vivo c odes First order Second order Strategies categories theme Soliciting customer feedba ck Customer Market led market Hiring staff with customer centered attitude approach orientation, centered atti tude Decision making closer to the cus tomer Affordable interest rate Avoiding Good manner ethical Flexible repaym ent customer stress and legal marketing, Light proced ures Gender bal ance Avoiding a buse Women participa tion Social expansion Post war post-war Self-employed busin ess Credit recovery development, as Livel ihood developm ent differentiation Rebuilding soc iety Redevelopment in ru ral Customer feedba cks Service Customer Customer Staff interac tion satisfaction relation service in good Customer satisfaction relation, maximiza tion Participation in group lendi ng Group delegation J o int liability P articipation in group-lending Delegation to group lea der

Health inequities through promoting social inclus ion

Source: Author constructed

770 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 771-778

MARKETING CHALLENGES FACED BY WOMEN ENTREPRENEURS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM SCALE ENTREPRENEURS

G.P.K.Nishadi Abstract

Women Entrepreneur is a person who accepts challenging role to meet her personal needs and become economically independent. However, researchers have found that women are generally weak at marketing their products and finding customers. So, the main problem of this study is to analyze the Marketing Challenges faced by Small and Medium scale Women Entrepreneurs when selling thier products in the competitive market place. The research was carried out in Matara district and Primary data were collected from a sample of 100 Women Entrepreneurs by using a positively ranked five point lickert scale. Sample was selected on the basis of criteria that they are maintaining their own business and are engaging in marketing activities. Basically, the marketing challenges were measured based on six variables as Challenges related to the Product, Pricing, Placing, Promotion, Networking and Competition. After feeding data into SPSS package, findings were analyzed quantitatively. Based on the analysis results of Entrepreneurs, it was found that Small and Medium scale Women Entrepreneurs are facing six basic Marketing Challenges when selling thier products in the competitive market place. This idea is proved by the statistical mean values closer to 2 for all the 17 items represented by the six basic variables. Further, the Cronbach's Alpha values highlighted that the scale is reliable and the six variables are properly measured by the 17 dimensions.

Keywords: Small and Medium scale businesses, Women Entrepreneurs, Marketing Challenges

1. INTRODUCTION Women are generally weak at 1.1 Background to the study and Problem marketing their products and finding Identification customers (Loyola J. 2005). Researchers Women Entrepreneur is a person claim that family issues such as giving who accepts challenging role to meet her proper time and fulfilling family personal needs and become economically culpabilities are the chief issues confronted independent. A strong desire to do by them (Rao and SuriGanesh, 2011). something positive is an inbuilt quality of Another inquiry supported the findings that entrepreneurial women, who is capable of women are mainly impelled to be the home contributing values in both family and social makers (Roomi and Parrot, 2008). Whereas life (Anitha D.P & Sritharan R, 2013). Hafizullahet al (2012) highlighted that male

Department of Marketing, Faculty of Management & Finance, University of Ruhuna, Matara, Sri Lanka [email protected]. 771 dominance in culture creates problems for Research Problem female entrepreneurs in terms of limiting What are the Marketing Challenges their mobility, business participation and faced by Women Entrepreneurs when market interactions. selling thier products in the competitive market place? Additionally, In many countries, women face unequal inheritance practices 1.2 Objectives of the study and laws, discriminatory laws on ownership The objectives of the study can be of property or access to bank loans, or identified in two ways as follows. discriminatory practices by banks (Commonwealth Secretariat, 2002). Basic objective the basic objective of this Charumathi (1998) identifies that in India, study is to analyze the Marketing Challenges married women have to make a fine balance faced by Women between home and business. Thus, despite modernization, tradition and family slow Entrepreneurs. down women. Moreover, in a study on Supplementary objectives women entrepreneurs in Bangladesh, Anwar In addition to the basic objective, the study (1992) found that due to the prevailing social was aimed to achieve following goals. norms, women entrepreneurs were 1. Analyze the current marketing practices prevented from managing their businesses applied by women entrepreneurs independently. These norms had restricted 2. Identify the other challenges that are women entrepreneurs' mobility, and thereby influenced to change women behavior affected interaction with others. According except marketing challenges to Gillani (2004), women entrepreneurs tend to operate only among clients that they 2.1 Women Entrepreneur know. Products are sold to relatives and Women Entrepreneur is a person friends and suppliers tend to be people who accepts challenging role to meet her already known to them. Thus, a more personal needs and become economically extensive network is lacking and expansion independent. A strong desire to do into a larger scale is not considered with something positive is an inbuilt quality of enthusiasm. Furthermore, Pooja N. etal,( entrepreneurial women, who is capable of 2007) found that during the process of contributing values in both family and social marketing of products women entrepreneurs life (Anitha D.P & Sritharan R, 2013). faced certain problems with poor location of shop, lack of transport facility and tough 2.2 Marketing Mix and other related competition from larger and established issues that are influenced to market the units. So, through this study, the attention product. has been paid to analyze the Marketing 2.2.1 Product Challenges faced by Sri Lankan Women A product is anything that can be Entrepreneurs when selling their products in offered to a market to satisfy a want or need. the competitive market place. Products that are marketed include physical

772 goods, services, experiences, events, facilitators (Kotler & Keller, 2006). persons, places, properties, organizations, 2.2.4 Promotion information, and ideas. (Kotler & Keller, Marketing communications are the 2006). means by which firms attempt to inform, persuade, and remind consumersdirectly or 2.2.2 Pricing indirectlyabout the products and brands that Price is the one element of the they sell. In a sense, marketing marketing mix that produces revenue; the communications represent the "voice" of the other elements produce costs. Prices are brand and are a means by which it can perhaps the easiest element of the marketing establish a dialogue and build relationships program to adjust; product features, with consumers (Kotler & Keller, 2006). channels, and even promotion take more time. Price also communicates to the market Marketing communications the company's intended value positioning of perform many functions for consumers. its product or brand. A well-designed and Consumers can be told or shown how and marketed product can command a price why a product is used, by what kind of premium and reap big profits. (Kotler & person, and where and when; consumers can Keller, 2006). learn about who makes the product and what the company and brand stand for; and 2.2.3 Placing consumers can be given an incentive or Marketing channels are sets of reward for trial or usage. (Kotler & Keller, interdependent organizations involved in the 2006). process of making a product or service available for use or consumption. They are 2.2.5 Networking and social Challenges the set of pathways a product or service Network Marketing also called follows after production, culminating in Multilevel marketing, describes systems in purchase and use by the final end user which companies contract with individuals (Kotler & Keller, 2006). to sell a set of products door to door or office to office. It is called multilevel because a Some intermediariessuch as contractor can also invite others to work and wholesalers and retailersbuy, take title to, earn money on their performance." (Kotler and resell the merchandise; they are called & Paul, 2005). merchants. Othersbrokers, manufacturers' representatives, sales agentssearch for 2.2.6 Comepetition customers and may negotiate on the Industry concept of competition producer's behalf but do not take title to the An industry is a group of firms that offer a goods; they are called agents. Still product or class of products that are close o t h e r s t r a n s p o r t a t i o n c o m p a n i e s , substitutes for one another. Industries are independent warehouses, banks, advertising classified according to number of sellers; agenciesassist in the distribution process but degree of product differentiation; presence neither take title to goods nor negotiate or absence of entry, mobility, and exit purchases or sales; they are called barriers; cost structure; degree of vertical

773 integration; and degree of globalization sample of 100 women entrepreneurs. (Kotler & Keller, 2006). Basically, questions were designed with special consideration given to several Market concept of competition demographic variables such as age, gender, Using the market approach, area of living, level of income and religion. competitors are companies that satisfy the Additionally, to measure marketing same customer need. For example, a challenges, a five point positively ranked customer who buys a word-processing lickert scale was used by giving the value 1 = package really wants "writing ability"a need Strongly agree to value 5 = Strongly that can also be satisfied by pencils, pens, or disagree. typewriters (Kotler & Keller, 2006). 3.5 Sample 3.1 Basic Methodology A sample of 100 small and medium Although, the study measures a scale women entrepreneurs was selected qualitative phenomena, quantitative randomly from Matara district, on the basis techniques have been applied for the of criterian that they are doing thier own purpose of facilitating the analysis. After business and engaging in marketing feeding data into SPSS package, data were activities. Further, the sample consists of analyzed quantitatively. entrepreneurs from different educational backgrounds, income levels and specially 3.2 Study Approach from different religious backgrounds. Before entering into this study, information was gathered from extensive 3.6 Data Analysis searching of internet sites, published Basically, frequency statistics were articles, and informal talking with some calculated to analyze the demographic women entrereneurs. Specially, variables. Further, the answers for the scale information from secondary data sources is based questions were measured by using facilitated by search engines such as Google descriptive statistics. Here, the marketing scholar, Ebsco host and J-stor articles. challenges of women entrepreneurs were determined by using mean values. 3.3 Pilot study Additionally, through Cronbach's Alpha, the Based on the information collected reliability of the scale was measured. from the secondary data sources, a pilot 4. DATA ANALYSİS study was carried out to assess the practicability of the research. For this 4.1 Analysis of Marketing Challenges purpose, 10 women entrepreneurs were 4.1.1 Product related challenges interviewed at randomly to collect data. Product related challenge is considered as the first and foremost variable 3.4 Research Instruments which was developed to measure marketing A Survey Based Questionnaire was challenges. Here, the respondents were used to collect primary data. asked three questions related to this variable 3.4.1 Survey Based Questionnaire and the findings can be explained as follows. A Survey based questionnaire was developed to collect primary data from a

774 Table 4.1 Product related challenges Table 4.2 Pricing Challenges

Variable Items Mean Variable Items Mean Lower volume of Poor ability to fix production is a big 2.50 the price is a big Product marketing problem Pricing problem that you 2.09 related that you are facing Challenges challenges are facing when selling products. Your product has a 2.55

lower demand You have to sell because of the products at perishability relatively higher 2.27 problem rates because of the higher per unit Your product has a cost lower bargaining 2.56 power at the market

Source: Survey data, 2013 this variable and the findings are explained As far as the data on table 4.1 is concerned, it in table 4.2. was the view of most of the women entrepreneurs that they are earning lower Source: Survey data, 2013 income due to lower volume of production According to the data on table 4.2, a and the perishability of the product. Further, significant portion of entrepreneurs they revealed that it is difficult for them to disclosed that poor ability to fix the price is a bargain the product at the market place big challenge they have faced when selling compared with alternative products offered the product at the competitive market place. by large scale entrepreneurs. The statistical Additionally, their net income is lower mean closer to 2 for all the three items becaue the products are sold at relatively proved these ideas. higher rate due to higher per unit cost.

4.1.2 Pricing Challenges 4.3 Placing Challenges The problem of designing a price is The next most important challenge the next variable identified to measure the that was faced by the entrepreneurs is the marketing challenges of women placing problem. Here, the study identified entrepreneurs. The two questions relating to several issues of placing as follows.

775 Table 4.4 Promotional Challenges Table 4.3 Placing Challenges Variable Items Mean Variable Items Mean

Your distribution You have problems cost is higher of Promoting your Placing because of 2.14 product because of 2.18

Challenges middlemen low income earned Promotional exploitation Challenges from the business

Transportation is a Your prod uct is not communicated to major problem you 2.42 are facing when 2.21 the market due to distributing the lack of role models product Your product is not

You have a problem communicated to of access to market the customers as 2.36 2.67 when selling your you are not having products enough marketing knowledge Source: Survey data, 2013 Source: Survey data, 2013

As mentioned in the table above, The data on table 4.4 disclosed distribution has become a big challenge due respondents views relating to the above to three reasons. According to their views, three items. Based on the statistical data, it the ultimate product price is higher due to seems that women entrepreneurs are in a middlemen involvment and higher problem of promoting thier products in the transportation cost. So,Like in the earlier competitive market place. The three possible two situations, the statistical mean values causes which hinder the product promotion closer to 2 for all the three items proved this are the low income generated from the idea furthermore. business, lack or role models and poor marketing knowledge respectively. 4.4 Promotional Challenges The fourth variable, which was 4.5 Networking Challenges identified to measure the marketing The fifth obvious challenge which challenges is the promotional problem. was faced by the women entrepreneurs is the Here, the study focuses three issues of problem of networking. To identify the communication as mentioned in the table issues of networking, respondents were below. asked another three questions as follows.

776 Table 4.5 Networking Challenges Table 4.6 Competition Challenges Variable Items Mean Variable Items Mean

You are facing a Lack of relevant networks is a major competition from Competition problem you are other small and 2.60 Challenges facing when medium scale 1.97 marketing your entrepreneurs that product produce the same Networking Challenges product. Lack of market information makes You are facing a 2.49 competition from a lower demand for large scale your product 2.07 entrepreneurs who It is difficult for are engaging in the you to market your same business.

product, since you 2.31 are a woman You are facing a competition from (Gender discrimination) other producers 2.60 who are producing Source: Survey data, 2013 substitue products.

As far as the data on table 4.5 is concerned, poor networking is a big problem faced by most of the women entrepreneurs. Source: Survey data, 2013 According to thier views, products are sold to the customers who are already known to According to the data on table 4.6, them and they have no good understanding competition is another major challenge about what is happening in the market place. which influences entrepreneurs' marketing Further, some of these women have been decisions. Here, the challenges of harrased by variety of organizations. competition was identified in three different ways as threats coming from those who are 4.6 Comeptition Challenges in the same scale, large scale and those who The last but not least challenge are producing the substitute products. Even which was faced by the entrepreneur is the in this case, the statistical mean values closer problem of competition. The three to 2 for all the three items proved the above dimensions related to this variable and the idea furthermore. results can be explained as follows.

777 4.2 Reliability Statistics 2 for all the 17 items represented by the six The data on table 4.7 revealed that the scale basic variables. is reliable and the six Marketing Challenges REFERENCES are properly measured by the 17 statements. Ali H. A., & Ali Y. S. A. (2013), Challenges This idea is proved by the Alpha values > 6 and Constraints faced by Somali for all the statements. Women Entrepreneurs in Benadir region. Interdisciplinary Journal of Table 4.7 Reliability Statistics Contemporary Research in Cronbach's Alpha No. of Items Business,5(2). Anitha, D.P., & Sritharan, R., (2013), .606 17 Problems Being Faced By Women Entrepreneurs in Rural Areas. The

I n t e r n a t i o n a l J o u r n a l O f Source: Survey data, 2013 Engineering And Science, 2(3), 52- Women Entrepreneur is a person 55. who accepts challenging role to meet her personal needs and become economically Aykut, B. ,& Kemalettin E. (2013), Women independent. However, researchers have Entrepreneurship & Problems in found that women are generally weak at Turkey, World Academy of Science, marketing their products and finding Engineering and Technology. 77. customers. So, this study focuses to identify Fridah, M. M. (2012), The Challenges the potential Marketing Challenges faced Facing Small-Scale Women by Women Entrepreneurs when selling thier Entrepreneurs: A Case of Kenya. products in the competitive market place. International Journal of Business Basically, the marketing challenges were Administration, 3 (2). measured by using six variables as challenges of Product, Pricing, Placing, Kotler, P. & Keller, K (2006), Marketing Promoting, Networking and Competition. Management 12th Edition, Prentice Additionally, sub items were identified to Hall, pp. 341-603. measure each variable as three dimensions Loyola, J. (2005), Inter-city Marketing for the Product related challenges, two items Network for Women Micro for the Pricing challenges, three items for the entrepreneurs Using CellPhone: Placing, again three for the Promotion, three Social Capital Brings Economic for the Networking and another three items Development. An Initial Survey of for the Competition respectively. the Foundation of Occupational Based on the analysis results of 100 Women Development (FOOD). 6. Entrepreneurs, it was found that Small and Medium scale Women Entrepreneurs are Pooja N., Avinash S., Jatinder K., Aruna R., facing six basic Marketing Challenges when Neena, V. (2007), Causes and selling thier products in the competitive Constraints Faced by Women market place. This conclusion was formed Entrepreneurs in Entrepreneurial based on the statistical mean values closer to Process. Journal of Social Science 14(2), 99-102. 778 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 779-789

GOING LOCAL: EXPLORING CONSUMER BEHAVIOUR AND MOTIVATIONS FOR PALMYRAH BASED PRODUCTS

S.Shaliny 1 and S.Sri Thayalan2

Abstract

In recent years, in Sri Lanka, government pays its focus on promoting palmyrah industry through developing appropriate marketing strategies. Before 1978, this agro-based palmyrah industry was excluded from the Sri Lankan national economic development plans and programmes compared to Coconut and Kithul based industries. Inherent limitations of the palmyrah industry influence the under-development of the sector in relation to socio-economic and cultural nature of the industry. With the establishment of Palmyrah Development Board (1978), improved programmes and actions pertaining to the production and marketing of the palmyrah industry were developed and contributed to develop as a sub-sector of the Sri Lankan agro-based industries. Due to various uncontrollable situations and factors in relation to marketing, the development of palmyrah industry failed to reach to an optimum level. In light of this trend, study on consumer behaviour and motivation pertaining to palmyrah based products (PBP) is becoming crucial. The study explored issues affect consumer motivation and decision. The stimulus-response model of buyer behaviour was adopted in explaining the consumer behaviour of PBP. The research subjects were people who know and are familiar with PBP in traditional marketplaces of North and East provinces, Sri Lanka. Observation, Interviews and Questionnaire were used to collect the qualitative data. Findings of the study showed environmental stimuli were stronger than marketing stimuli. Buyers' characteristics strongly influence the decision process, meanwhile problem recognition, information search and alternative evaluation were found to contribute minimal.

Keywords: : Consumer behaviour, Buyer, Palmyrah products, Motivation

1. INTRODUCTION palmyrah based industry, which play a This study will explore more about significant role in production and marketing several factors that influence the consumer of these products. behaviour and motivation in buying Palmyrah Based Products (PBP) in The objectives of this research are to traditional markets. In particular, this study develop an appropriate model to identify the will explore the suitable conceptual model consumer behaviour and enable the for buying bahaviour of consumers in producers to specifically reach the goals. It is

1 Palmyrah Research Institute, Kaithady, Jaffna, [email protected] 2. Palmyrah Research Institute, Kaithady, Jaffna, [email protected]

779 expected that this study will contribute to the In North and Eastern provinces, development of a conceptual model on how approximately one third of the population in consumers' behaviour is affected by factors these districts, where more than 90% of the of environment as well as market. palms are located, depends directly on the palmyrah tree for their livelihood. Every 1.1 The Palmyrah and Its Industry part of the palmyrah palm has an economic Palms of the genus Borassus come value and can be used for human second only to the Coconut in the palm consumption. (Rupasena.L.P, 1995). population of the world. The palmyrah tree has a very ancient ances try in In Sri Lanka, the infrastructure of paleontological terms. The dispersal of the the industry is not very complicated, but palmyrah over Africa and Asia is quite consists of three types of producers such as extensive and they are able to grow in Sri individual producers, Palm Development Lanka, India, Indonesia, Cambodia, and Co-operative Societies and Palmyrah Thailand (in both dry and wet region). Development Board. Similarly in India, Palmyrah ranks as a lesser known palm Palmyrah Workers Development Society when compared to the economically (PWDS) is organized in 1977, operates cherished Coconut, Date and Oil palms. The primarily for the socio-economic reason may be that, taken individually, each development of marginalised people. Palmyrah product has a superior competitor: Information pertaining to Palmyrah based sugar from cane and beet; alcohol and industry in African countries is not available vinegar from numerous sources; fibre from in literature. the Coconut, jute and sisal; timber from the dicotyledonous stalwarts of the tropical Palmyrah related activities were not forest. The simple rationale of avoiding a scientifically regularized and supported by single-crop economies; the natural habitat of the government to promote as a sub sector of the Palmyrah turns out to be in the reputedly the national industrial sector in the North poorest and infertile regions, hardy, and East provinces of Sri Lanka, till 1978. singularly free of pests and diseases, and Palmyrah Development Board was requiring limited means of cultivation established in 1978, with the main aim of (Kovoor, 1983). empowering the livelihood of palmyrah dependent communities. After the "Green” products can be defined as establishment of PDB in the Northern those that do not harm the environment and region; formal, methodical and scientific contain no potential harmful elements. approaches were followed to promote the Globally the eco-literacy is lacking that is, palmyrah industry as an organized Agro- the information available for consumers based industry. The sales outlets of PDB about “green” products. (Gunawardena, known as 'Katpaham'(palmyrah palm is 2012). Palmyrah products are considered as known as Katpahatharu in tamil), are Green products, hence the producers are also established all over the country to enhance known as "Ecopreneurs". the sales PBP.

780 Marketing appears to be the bottleneck of Cash cost is minimal for the products like the industry. The situation prevailed in North handicraft. (Rupasena & Chandrasiri, 1993). and East provinces of Sri Lanka has also curtailed the marketing activities of PBP. This reflects that the consumers of (Devarajah, 1988) PBP are not adapted to regular marketing structure such as buying and selling The organization of the palmyrah practices unlike other products. This is being product marketing system refers to the an bizarre situation until recently, since characteristics of the system participants, most of the production is carried out at home flow of commodity movements and their for own consumption. Hence an ordinary behaviour, and the nature of the competition. tradition of buyer-seller relationship was The marketing system organization for PBP seen in the palmyrah industry to have a varies by location and type of products. In consumer history in marketing of these locations where more production takes products. place, marketing system is organized better This study will be a beginning to the concern placed towards consumers of PBP, since than other areas. In the districts of North and there are no literature available in this East, marketing is relatively better than specific area. other areas because production is widely concentrated on such areas. with regard to 1.2 Consumer Behaviour and Motivation the type of production, marketing system Philip Kotler defines Marketing as a differs due to nature of the commodity and social and managerial process by which the type of users. individuals and groups obtain what they need and want through creating, offering, Marketing activities associated with and exchanging products of value with palmyrah industry are not intricate, because others. A market consists of all the potential the industry still remains at the subsistence customers sharing a particular need or want level. Producer himself undertakes most of who might be willing and able to engage in the marketing functions. The industry runs exchange to satisfy that need or want. In this with traditional technology which era, the seller market has disappeared and extensively uses family labour. (Rupasena & buyers market has come up. This leads to a Chandrasiri, 1993) paradigm shift of the manufacturer's attention from product to consumer and Exchange of products which mainly specially focused on the consumer consists of buying and selling are performed behaviour. The heterogeneity among people on informal basis especially at producer makes understanding consumer behaviour a level. In most cases, principal buyers at farm challenging task to marketers. level are consumers within the area. Therefore, pricing is not done either The task of marketing is to identify systematically or scientifically. The other consumers' needs and wants, then to develop reason is that the cost of inputs is minimal. products and services that will satisfy them.

781 Only by gaining a deep and comprehensive 1.3 Concepts and Models understanding of buyer behaviour can Consumer behaviour and consumer marketing's goals be realised. Such an decision making have become prominent understanding of buyer behaviour works to research topics in various fields of consumer the mutual advantage of the consumer and science in recent years. A number of marketer, allowing the marketer to become different approaches have been adopted in better equipped to satisfy the consumer's the study of decision making, drawing on needs efficiently. The term 'consumer' is differing traditions of psychology. typically taken to mean the final user, who is Throughout the 1960s attempts were made not necessarily the customer. (Wilson & to integrate a variety of theories, findings Gilligan, 2005). and concepts from the behavioural sciences into a general framework which could be Consumers are viewed as rational used to explain and predict consumer decision makers who are only concerned behaviour. (Wilson & Gilligan, 2005). with self interest. Contemporary research on consumer behaviour considers a wide range The stimulus-response model of of factors influencing the consumer, and buyer behaviour was used to explain the acknowledges a broad range of consumption behaviour of the consumer of PBP. These activities beyond purchasing. (Bray, 2008, models explain the economic, social, p. 1). More recently, the interdisciplinary political and technological factors influence importance of consumer behaviour has the buyer characteristics dominated by increased such that sociology, anthropology, cultural, social, personal and psychological economics and mathematics also contribute characteristics of the buyer. The buyer to the science relating to this subject. characteristics influenced the buyer's decision pertaining to product, brand, dealer, M o t i v a t i o n r e f e r s t o t h e quantity and the purchase time. psychological force that enables action. The type of goal under consideration can Marketing stimuli consist of the influence the pattern of motivation: whether four Ps: product, price, place, and motivation increases or decreases. (Touré- promotion. Other stimuli include major Tillery & Fishbach, 2011). Motivation, forces and events in the buyer's rather than being stable and individual, is a environment: economic, technological, dynamic process because it can be activated political, and cultural. All these inputs enter from various different sources, because it the buyer's black box, where they are turned can be activated without intervening into a set of observable buyer responses: conscious choice, and because the same product choice, brand choice, dealer choice, stimulus can activate different motivations purchase timing, and purchase amount. The depending on the person or the situation. marketer wants to understand how the Operating motivations, consciously or non- stimuli are changed into responses inside the consciously, influence consumers' thoughts, consumer's black box, which has two parts. feelings, and behaviour. (Espinoza, 2009). First, the buyer's characteristics influence

782 how he or she perceives and reacts to the systematically for scientific purposes. P.V. stimuli. Second, the buyer's decision process Young, "Interviewing is not a simple way to itself affects the buyer's behaviour. conversation between an interrogator and informant. Gestures, glances, facial The nature of buyer-seller expressions, pauses often reveal subtle relationships is therefore of potentially feelings". Goode and Hatt defined as ' considerable significance and needs to be Interview is fundamentally a process of taken into account when examining any social interaction'. (RAJ, 1992). market sector. (Wilson & Gilligan, 2005). Since there are no secondary data 2. METHODOLOGY available on consumer nature, interviews Qualitative method was adapted to were conducted among the sales employees study the consumer behaviour and of 'Katpaham' sales outlets in Jaffna and motivation for PBP. It is one of the important Colombo. Sales personnel can provide methods for study of social problems. In this information about the demography of research, study on consumer behaviour is customers instead of any marketer, because more on social science rather being on practically the market interface is shared logistic marketing activity. It is seen through only by both in reality. In addition to this, regional, cultural and personal views and data were collected through interview from perception instead of a normal profit making the employees of sales unit of Palm process. Hence, the research tools were Development Co-operative Society, chosen on the basis of this, which perfectly Pandatharippu. Consumers who regularly matches with the objective of the study. purchase from the outlets of 'Katpaham' centres in Jaffna and Colombo were also In order to study the behaviour of interviewed. the consumers in North and East provinces of Sri Lanka, primary data was collected 2.2 Observational Method from the sample population by using three The observation method was used to research tools such as observation, interview identify the nature of the consumers and the and questionnaire. factors influence their attitudes, habits and behaviour of purchasing the Palmyrah 2.1 Interview Method Based Products (PBP). In order to collect the Interview has been defined information those were not available other differently by different social scientists. In way, were collected through observation. By the words of Fred. N. Kerlinger, “The using a checklist, this tool has been interview is perhaps the most ubiquitous employed. The observation method was method of obtaining information from used to identify the consumer's age group people. It has been and is still used in all and their retention. The purpose of this kinds of practical situations; only recently, technique was to ensure the continuity of however, has the interview been used purchase in the long run.

783 The traditional consumers habits of the nature and the behaviour of the purchasing PBP are predominated by the consumers. Qualitative information was seasonal consumption pattern depend on the used to trace the expected satisfactory level availability of the PBP. Observation and and the purchasing habit of the consumer. interview techniques helped to identify the The open-ended questions were used for this invisible and inaccessible nature of purpose. A convenience sample of 77 purchase. In relation to PBP, it was not customers was selected for this study and induced by the consumer or the demand questionnaire was developed. force of the market. Really it was supply based consumption and demand is created 3. RESULTS seasonally. Therefore there was no regular Common themes that emerge from demand created by the consumer as the observation, interviews and questionnaire supply was not available throughout the were compiled into four broader categories year. in terms of cultural, social, personal and psychological aspects of the Stimulus- 2.3 Questionnaire Method response Model. Questionnaires were used to collect

Figure 3.1 Buyer's Black box

Source: http://www.tutor2u.net/business/marketing/buying_stimulus_model.asp

784 3.1 Culture and Sub-culture Changes in culture tend to be slow and are Since palmyrah industry has a not fully assimilated until a generation or socio-cultural dominance, the cultural more has passed. PBP are produced by aspects are important in the marketing of the targeting the Tamil community of North, product. East and Western provinces of Sri Lanka. Since palmyrah trees are abundantly found Cultural influences are powerful, if in these provinces, consumers have a high a sector does not understand the culture in level of awareness about the products. Tamil which a particular market operates, it cannot community is dispersed in many Western hope to develop products and market them countries, have different geographical areas. successfully and profitably in that market.

Figure 3.2 The Stimulus-response model of buyer behaviour

Source: (Wilson & Gilligan, 2005, p. 157)

The major Sinhalese community in Culturally, communities other than Tamils Sri Lanka does not consume PBP reasonably of Northern East provinces do not create like other tree crops like Kithul and Coconut. sustainable market for PBP, due to Only a small group of people from Central limitations and weaknesses of its marketing and Southern provinces who live with practices. Tamils or in the geographical areas where Sri Lankan Tamil population dominates. In Another major cultural change is recent years, after 2009 Sinhalese who transition in the role of women in society. oftenly visit to the Northern province as a Though increased independence and local tourism destination, started buying economic power have changed the lives of PBP. This is the new trend develops slowly. women and their own perception of their

785 socio-economic role, in this industry income, occupation, habitats and production of handicraft is depending on consumption culture. These elements of women group, with no men in the family social class are very strongly affecting the .This aspect can be used to as a tactic to marketing of palmyrah products. attract the consumers in export market, traditionally rural based, low income, similarly like what happens in Cadbury working class people create demand for Dairy Milk Chocolate in first world PBP. The urban population did not prioritize countries. the PBP when compared to rural population. Likewise urban labour force does not create When we consider the export popular demand for these products market in Western societies today, when compared to Tea, Beer and Arrack. The considering culture, the subcultures also lifestyle of the urban labour force is m u s t b e c o n s i d e r e d . I m m i g r a n t becoming more strong in creating demand communities have become large enough in for products like Toddy, Jaggery, Tuber many countries to form a significant based products and Handicraft items. proportion of the population of that country, The urban labour community or the and marketers must consider them because community with higher income do not have of their interactive influence on society and consumer behaviour that supports the because, in some cases, they constitute demand for PBP. Generally they are not individual market segments for certain habitually addicted to these products product areas. Subcultures can also exist compared to Coconut arrack. within the same racial groups sharing common nationality. Their bases may be 3.3 Personal and Psychological Aspects geographical, religious or linguistic Behaviour of consumers is differences and marketers must recognise generally influenced by the buyer's set of these differences and should regard them as personal characteristics including age, life providing opportunities rather than posing cycle stage, occupation, economic problems. For example, immigrants from Sri circumstances, life style and personality. Lanka and India may differ in their And psychological influence upon geographical attribute , but may comes consumer behaviour consists of four under same religious, cultural values which principle psychological factors. Since all allow them to be in a same target consumer these aspects about buyers are inter-related, group. Hence export market of palmyrah which share enormous amount of products will be sharing by consumers with information in the common face, consumers different nationalities, but still with same of Palmyrah based products cannot be cultural trends. characterised specifically in each sub- categories. 3.2 Social Class Social aspects are highly influential Consumer behaviour is not very in the behaviour of consumers who buy PBP. favourable to the expansion of markets of The chief determinants of social class are PBP. But certain types of products of

786 palmyrah such as Jaggery, Odiyal, Odiyal high income group of consumers as well as flour and Handicrafts are demanded by all the export markets. types of consumers, but even though there is a continuous greater demand in the market, Moreover, the products have never there are constraints in the production side to been estimated for the quantity sold and the supply to fulfill the quantity required. It is price they offered and the nature of the found that there is no habitual buying behaviour of the consumers. They do not behaviour among the youngsters. differentiate the revenue on the basis of the different types and range of prices of PBP. In For a longer period, families of rural addition, producers have never had a area in the Northern East produced many practice of calculating the cost per unit on palmyrah based products at their houses for the basis of the labour they put and other their own consumption. The concept of self- inputs. Even traditionally the family level sufficiency was practiced. There was no mixed labour inputs were not economically selling-buying tradition in palmyrah sector. valued in view of commercialised In other words there is no group of people marketing. This pattern of informal labour, called "consumers" for Palmyrah based production, and pricing has not directed products in last era. them to fix the prices and the profit margins on the cost based pricing. They fix the prices 4. DISCUSSION AND CONCLUSION on the basis of the tacit estimation. It is observed that the consumers of Sometimes producers were even prepared to PBP give less priority to make decisions in sell their products for the prices below the relation to purchase than the environmental cost of production when they need to earn stimuli such as economic, social and income. Especially, the trade of palmyrah technological factors. toddy was solely done by the women in middle-age or older age, they involved in Nearly three decades ago, the old marketing without adequately knowledge generation who are in rural area, about real marketing aspects. And lack of traditionally consumed PBP only in the practice in recording any kind of statistics season when producers supply to the rural and details of accounts also led to unorganised markets or available at the insufficient data to the beginners of the cottages where they live. Since most of the industry in a scientific and pragmatic manner. Weaknesses of the producers and Producers of palmyrah based suppliers leads to unorganised and un- products are individuals, from lower income economical, marketing practices for a longer group and had very low level of period, because organised entrepreneurs or technological inputs to the industry, which corporate sectors were not entered into the allow them to sustain it in cottage level. This production and marketing of PBP. Palmyrah palmyrah dependent community occupied sector was maintained at a sociologically the lower strata of the society. Due to that, deprived status for a long period. Due to the producers were not able to access to the these non-scientific approaches, techniques

787 and practice applied to Palmyrah production image for their product among new and marketing, traditionally modern generations through advertisements, sales business norms, standards and practices promotion campaigns, and techniques. were not introduced in this sector, until PDB Financial supports, encouragements and introduce such quality norms, standards and incentives were not provided to the practices. This was a great challenge to the Palmyrah producers and marketing sources. producers when they began an organization No government or corporate sector like either PDCS or PDB. involvement were encouraged due to the inferior social status of the product which Urban based organized sales established traditionally. centres, supermarkets and hotels were not supplied PBP in view of the modern C h a n g i n g l i f e s t y l e a n d marketing. It curtails the possibilities of consumption patterns of the new younger adapting the latest marketing practices that generation do not match with the unchanged provide safety and profitable markets for product nature, packing and pricing. PBP. Consumption of Palmyrah product is Modern, organised, formal producers and mainly determined by traditional get marketers were not attracted by palmyrah together and festivals that celebrated sector for longer period of time. occasionally and the seasons when PBP are available. Store management, processing Traditional crude technology did techniques were not scientifically adopted not help to promote the quality, pricing and by the unorganized Palmyrah producers, due branding of PBP. Because of this, marketing to the negligence of the state and organized of PBP have not reached the optimum commercial sectors. growth to a profitable market and failed to attract young, higher income, fashioned Younger generation who lives in customers. Hence, if all these attributes of urban, semi-urban areas do not aware the the sector are improved, definitely usage of PBP until recent times. Even marketing stimuli will overcome the youngsters who live in rural area do not give environmental stimuli, directs the real priority in their consumption pattern output in a profitable way.bThus, this study compared to the industrial products such as will be totally a new initiation to the industry beverages and ice cream. Advertising of palmyrah in Sri Lanka, which is agencies and medias never advertise the exclusively consumer oriented. products of palmyrah to promote the 'super image' for the product among the youngsters ACKNOWLEDGEMENT who could provide sustainable market in the The authors would firstly like to future. thank the staff of Palmyrah Research Institute for their co-operation and support. Traditional Palmyrah producers The authors would also like to thank Mr. were not educated to promote the super Mahen Muttiah for his invaluable advice on

788 the methodology utilized. The authors http://finacialsrilanka.blogspot. receive financial support from Palmyrah c o m / 2 0 1 2 / 0 4 / r e s e a r c h - Development Board, Sri Lanka. proposal-green-marketing.html

REFERENCE Kovoor, A. (1983). The palmyrah p a l m : p o t e n t i a l a n d Bray, J. P. (2008). Consumer perspectives. Rome: Food and Behaviour Theory: Approaches Agriculture Organization of the and Models. Retrieved 12 20, United Nations. 2013, from Bournemouth University Research Online : RAJ, H. (1992). Theory and Practice i n http://eprints.bournemouth.ac.k/ S o c i a l R e s e a r c h . N e w 10107/1/Consumer_Behaviour_ Delhi: Surjeet publications. Theory_- _Approaches_% Rupasena, L., & Chandrasiri, A. 26_Models.pdf (1993). Marketing of palmyrah Devarajah, S. (1988). A proposal for products. Colombo: Hector establishing a technical wing to K o b b e k a d u w a A g r a r i a n support an integrated palmyrah Research and Training Institute. rehabilitation and development Rupasena.L.P. (1995). Marketing of p r o g r a m m e . C o l o m b o : palmyrah based products. Palmyrah Development Board- Colombo: Hector K o b b e United Nations University. kaduwa Agrarian Research Espinoza, F. d. (2009). The influence o f and Training Institute. consumer motivation on Touré-Tillery, M., & Fishbach, A. consumption intentations and (2011). The course of m o t i v a - behaviour . tion. Journal of Consumer Gunawardena, K. (2012, April 15). Psychology , xxx-xxx (10). Research proposal-Green Wilson, R. M., & Gilligan, C. (2005). marketing. Retrieved January S t r a t e g i c M a r k e t i n g 18, 2014, from Colombo Stock Management. New Delhi: Viva Market Financial Research: Books private Limited.

789 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 790-795

DETERMINANTS OF VIEWERS' CHOICE ON PRIVATE NEWS CHANNELS

L.P. Himali1 and Rasika Kuruwitage2

Abstract

Viewers' choice for the news channels is a physiological phenomenon, varies for each viewer. The future of any economic entity is determined by the customers' choice. Private news channels use various strategies to attract viewers to face the high competition of the news channels industry in Sri Lanka. The main objective of the study is to identify viewer characteristics and factors affected to the viewers' choice on private news channels. Primary data was mainly used by the study through a questionnaire. 25 academic staff members and 25 nonacademic staff members, 25 students in Sabaragamuwa University of Sri Lanka and 25 villages in Pabahinna Grama Niladhari division were selected by the study by using a convenience sampling method. Chi square test statistic was used to identify the determinants. Study found that viewers' political party, residential sector, age of the viewer, choice of family members, time that the news telecasted, coverage and reliability of the broadcasted news are the very important factors that the viewers' consider before choosing a news channel. The most significant fact revealed by the study is that gender, level of education and working status of the person are not the basic reasons for selection of a news channel. Most of viewers are rural resident and 100% of urban resident watching privet news channels. Females are watch news than males. Approximately more than 70% of the subjects watch Hiru TV news and therefore according to this study famous private news channel is Hiru TV.

Keywords: Determinants, News channel, Viewer choice

1. INTRODUCTION news they will give new update as soon as News is the statement which report possible with visually. the incident as it is. There are several ways to catch the news in today world. Those Television news is very image- methods are newspapers, radios, televisions based, showing video of many of the events and internet. Among these methods most that are reported. Television channels may popular method is television. Because provide news bulletins as part of a regularly newspaper they report yesterday news today scheduled news program. Less often, and also watching news from internet is not television shows may be interrupted or popular method in Sri Lanka. In television replaced by breaking news ("news flashes")

......

790 to provide news updates on events of great than state news channels. However, there is importance. Maseviya (1854) introduce the no proper correct answer for this since it formula for the news. That formula was totally depends on viewer's individual A+B+C=C. A means accuracy, B means opinions. And there is no proper research balance, C mean clarity equal Credibility. It was conducted to identify whether state means credibility of news depend on news channel or privet news channel are accuracy + balance + clarity. most popular and what is the most popular news channel among them all. Therefore, it In Sri Lanka there are mainly two is important to conduct a study in order to state television news channels and twenty make people aware & more informed. two privet news channels. News telecast on different time slot and same time slot in 2. RESEARCH OBJECTIVES channel due to viewer's convenience. Main objective is identifying the determinants of viewer's choice on news This research was conducted to channels. Sub objective is identifying the identifying distinguishing factors between most popular news channel in Sri Lanka. private & state news channels which make those more interesting. It is obvious that 3. SIGNIFICANCE OF THE STUDY there is a high competition between these For the very existence of a news two. It is not only between these two but with channel, it is necessary to understand about each other also. The main reason for this the viewers' choice. When consider about could be because they have their own vision the viewers' choice it may be vary from one “to become the leading news channel in the person to another due to various factors. country”. Therefore to achieve this target Thus, this study provides high level of they try to improve the productivity & knowledge in understanding about the quality as well as state owned channels as viewers' preference and how it differs under the channels of the nation would not willing the range of factors. By knowing this, the to hand over their status to private channels. channel institutions can launch their operations according to the viewers' In order to differentiate themselves preparation. from others they use various tactics new patterns & recruit young talented personnel In Sri Lanka there is very few whose talents are beyond news reading. As studies conducted regarding this and when well as some times it became a trend that considering world also this is the same. they tried to imitate certain channels & Therefore, this research can be taken as a audience always prefer to see more reference by the researchers who want to do creativity even in imitating also so they a research on this field. switch to a different channel which they feel good. 4. METHODOLOGY The methodology includes sample These days there is a trend of selection, data collection and data analysis popularity news channel becoming privet methods used throughout the study. Primary

791 data was mainly used by the study through a areas are watching government news questionnaire. 25 academic staff members, channels. 25 nonacademic staff members, 25 students of Sabaragamuwa University and 25 villagers in Pambahinna area were selected for this study using a convenience sampling method. Chi square method was used as an analyzing tool.

5. RESULTS 5.1 Descriptive Analysis Figure 5.1.3: Viewer's Choice on News Channel Vs Working States Source: Sample survey, 2013 Figure 5.1.3 shows that, more than 50% of the people who are belonging to both having and not having a job watched privet news channels compare to the government news channel.

5.2 Advanced Analysis Figure 5.1.1: News Channels Vs Gender This study has done to identifying Source: Sample survey, 2013 the determinants of viewers' choice on According to the figure 5.1.1, large private news channels. Chi Squire Test is numbers of female are watching state news used to check the association under 0.05 channels and that is more than 50% of the significance levels. sample. In this study dependent variable is channel type (government/privet) and working status, educational level, viewers' political party, residential sector, gender, age of the viewer, choice of family members, time that the news telecasted, coverage and reliability of the broadcasted news are the independent variables.

5.2.1 Hypothesis Figure 5.1.2: Viewer's Choice on News H : There is no association between Channel Vs Living Area 0a viewer's choice on private news Source: Sample survey, 2013 channel and age. Figure 5.1.2 explains that both urban and H : There is no association between estate sector people are totally watching 0b privet news channels. Compare to the other viewer's choice on private news areas 25% of viewers who are living in rural channel and residential sector. 792 H0c: There is no association between According to the table 5.2.2.1, the viewer's choice on private news variables, age, residential sector, political channel and working status. party and choice of family members are

H0d: There is no association between highly associated with the viewers' choice viewer's choice on private news on private news channels. channel and educational level.

H0e: There is no association between viewer's Table 5.2.2.2: Economic Factors choice on private news channel and Independent Chi P viewers' political party. Decision Variable Value Value H0f: There is no association between viewer's Working 0.132 0.731 Do not choice on private news channel and gender. status reject H0 H : There is no association between 0g viewer's choice on private news Source: Sample Survey (2013) channel and choice of family members. According to the result of chi- square test, viewer's choice on private news H0h: There is no association between viewer's choice on private news channel is not depending on working status. channel and time that the news telecasted. Table 5.2.2.3: Factors Related with News Channels H0i: There is no association between viewer's choice on private news Independent Chi P Decision channel and coverage. Variable Value Value H0j: There is no association between Coverage 14.774 0.000 Reject viewer's choice on private news H0 channel and reliability of th e Reliability of 3.464 0.010 Reject broadcasted news. the news H0 Time that the 19.381 0.000 Reject 5.2.2 Summary of Chi-Square Test news H Table 5.2.2.1: Socio Demographic Factor 0 telecasted

Independent Chi P Decision Variable Value Value

Age 6.629 0.010 Reject Source: Sample Survey (2013) H0 According to the table 5.2.2.3, all Gender 0.121 0.728 Do not reject H0 above mentioned factors are highly Residential 9.202 0.010 Reject associated with the viewers' choice on sector H0 Viewers’ 6.694 0.010 Reject private news channels. political H0 party Educational 1.941 0.164 Do not 6. CONCLUSION level reject H0 Choice of 11.174 0.025 Reject The primary purpose of this study is family H0 members to identify the determinants of viewers'

Source: Sample Survey (2013) choice on private news channels. In

793

particular, the study examines the private high and attractive. They tell a story rather news channel that people mostly watched. than just reading the news. Therefore it is One interesting and disturbing finding is the recommended for the government channels viewers' political party, residential sector, to be very innovative. age of the viewer, choice of family members, time that the news telecasted, coverage and For most of urban and rural areas reliability of the broadcasted news are the private channel network is more available very important factors that the viewers' and for rural areas government channel consider before choosing a news channel. network is more available this is due to wide The most significant fact revealed by the coverage of government networks. study is that gender, level of education and Therefore private channels are also working status of the person are not the basic recommended to increase their network reasons for selection of a news channel. coverage in order to increase competition. There is a high influence on residential Parliament act should broad in that sector with news channels. Urban and estate government news channels should present viewers are 100% watching privet news both in a balance way. This would attract channels and no one watch government more people toward government news. news channels. Females are watch news Murder, suicide, robbery, sexual harassment than males. Approximately more than 70% are sometime reported in private news of the subjects watch Hiru TV news and channel in a way that it sometime motivate therefore according to this study famous people to do those crimes this should be private news channel is Hiru TV. presented them in a proper manner that people prevent themselves doing crimes. 7. RECOMMENDATION Main finding of this research 8. REFERENCES indicates that people's preference towards private news channel is high. Therefore it is Armstrong, M. (2005). Public Service recommended to increase the competition Broadcasting. Fiscal Studies 26(3): among the channels so that viewers have 281-299. number of choices and would help them to get the best possible out of them. Bennett, W. L. (1996). News: The Politics of Illusion, (3rd ed.). White Plains: One of the main reasons why people Longman. prefer private channels is reliability. Today many Sri Lankan government channels are Bettag, T. (2000). Evolving Definitions of more biased towards the government and News. Harvard International sometimes this shows lack of reliability in Journal of Press Politics.5.3, 105- news. Therefore government channels 107. should also try to be independent and should present truthful news. The presentation skill Bowker, N.J. R.R. (1999). Broadcasting and of private news channel presenter is very Cable Year book.New Providence.

794 Budzilowicz, L.M. (2002). Framing Pollingreport.com. (2002). News Responsibility on Local Television Media/Communications. Available: News. Local TV News Media http://www.pollingreport.com/med Project. University of Delaware. ia.htm. [June 12, 2013]. Epstein, E. J. (1974). News from Nowhere. Tuchman, G. (1978). Making news: A study New York: Vintage Books. in the construction of reality. New Nielsen Media Research. (2002). Available: York: Free Press. http://www.nielsenmedia.com.[Feb ruary 14, 2013].

795 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 796-806

THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT PRACTICE ON CUSTOMER LOYALTY (SPECIFIC REFERENCE TO LOCAL COMMERCIAL BANKING SECTOR IN JAFFNA DISTRICT)

Natkunarajah Umakanth

Abstract

Managing effective Relationship Marketing Practices are increasingly important in the banking industry. Since the length in years of customer relationships are one of the most important factors that contribute to the profitability. As a result Customer Satisfaction may be one important driver of Customer Retention The goal of this research project is identify and assess impact relationship marketing practice on loyalty in local commercial banking sector in Jaffna. The research was mainly based on data, collected from customers in Jaffna commercial banks. Quantitative methodology has been applied and questionnaire was used to collect data, descriptive statistics as well as inferential statistical analysis using SPSS. 17.0 household customers have been selected from 34 licensed commercial banks that comprised of public and private bank. Multiple regression has been used for the analysis .The results of the statistical analysis showed that is a strong positive impact of relationship marketing practices on customer on Loyalty. Therefore these findings will help the banks to establish a customer oriented strategy to retain their customers in future.

Keywords: Relationship marketing, Customer Loyalty, Banking Sector, Sri Lanka

1. INTRODUCTION developing and maintaining mutually long Globalization and technology term relationships with customers ( Buttle, improvements have forced companies into 1996). This new business philosophy is tough competition. In this new era called relationship marketing (RM), which organizations are focusing on managing has attracted considerable interest both from customer relationships, particularly marketing academics and practitioners customer satisfaction, in order to efficiently (Grönroos, 1994). In practice, however, the maximize revenues (Constantinos, 2003). 'customer markets', with the latest relational Today marketing is not just developing, concept customer relationship management, delivering and selling, it is moving towards CRM, remain the primary focus and, as

Registrar, Advanced Technological Institute Jaffna, Sri Lanka

796 such, Peck (1999, ) place them firmly at the affect relationship outcomes in the target centre of the six-market model of segment. relationship marketing. It is important, therefore, to Customer oriented Relationship empirically examine the actual impact of the marketing programmes that enhance the underpinnings of relationship marketing on flow of information between the bank and customer loyalty. Conversely, in common customers increase customers' positive with most service industries, customer feelings towards their bank, thereby also loyalty is an important aspect of stability and increasing satisfaction and relationship growth within the banking sector because strength (Barnes and Howlett, 1998; Ennew maintaining an existing customer provides and Binks, 1996). Although past studies several economical benefits. Indeed, provide knowledge regarding the nature and customer loyalty has become a key goal of importance of banking relationships from a most business (Berry & Parasuraman, customer (O'Loughlin et al., 2004), business 1991). Such understanding will assist in (Madill et al., 2002), and dyadic (Paulin et better management of firm-customer al., 1998; Akerlund, 2004) viewpoint, some relationship and in achieving higher level of questions remain unanswered. For example, loyalty among customers. information on extent to which specific relationship marketing programmes have However, Palmer (1997, p. 321) has succeeded in strengthening relationships in cautioned that: “… relationship marketing different segments. Relationship marketing means different things in different cultures can, but need not be, directed towards all and marketers should be as wary of customers of the bank. Most retail banks are prescribing universal solutions for exchange characterised by having both profitable and bases as they are of developing universal unprofitable customers, where the former product and promotion for all markets”. subsidies the latter (Carson et al., 2004; Accordingly this research study investigates Zeithaml et al., 2001). Retaining the the impact of four underpinnings of profitable customers has become relationship marketing trust, commitment, increasingly difficult in a competitive communication, and conflict handling on environment where other financial customer loyalty of banking industry in institutions specialize in offering attractive Jaffna aspect. services and prices to this lucrative segment. Since investments across all customer In today's competitive environment, segments will not yield similar returns customer retention and profitability have (Zeithaml et al., 2001), relationship become paramount for the success of marketing is often directed only at the most banking industry. Many banks have now profitable segments defined by, for example, come to realize the benefits of creating income and wealth (Abratt and Russell, lifelong associations with fewer, but more 1999). There is, however, a lack of research profitable consumers. Relationship on how relationship rarketing activities marketing activities can have a major impact

797 on an organization, by improving customer Hunt,1994: Ndubisi et al.2004), equity ( satisfaction and longevity, reducing Ndubisi 2004), benevolence, empathy, marketing expenses, in addition to providing (Ndubisi,2004) commitment (Morgan and a competitive edge. Hunt, 1994), conflict handling (Ndubisi, 2004), communication or sharing of secrets 2. LITERATURE REVIEW AND (Crosby 1990, Morgan and Hunt 1994) and PREVIOUS STUDIES competence (Ndubsi,2004). Kavali (1999) Interest in the economics of long concluded that relationship marketing is lasting customer relationship has growing about healthy relationship characterized by since the last decade. Relationship trust, equity and commitment. marketing establishing, maintaining and enhancing relationship with customer and In this part we can have a look on other partners at a profit, so that the customer loyalty. Kotler(2003) define objectives of the parties involved are met customer loyalty as the purchase from the (Grontoos, 1994). This is achieved by a company by its customers expressed as a mutual symbiosis and fulfillment of percentage of their total purchases from all promises (Ndubisi, 2003). The suppliers of the same product. Asker (1991) phenomenon described by this concept is discussed the role of loyalty in the brand strongly supported by on going trends in equity process and specifically noted that modern business (Webster, 1992). Nelson brand loyalty leads to certain advantages, and Ndubisi(2007) argued that the goals of such as reduced marketing cost and more relationship marketing are to create and new customers. maintain lasting relationship between the firm and its customers that are rewarding for Therefore, loyalty is a concept that both sides, while Blobqvist el al (1993) goes beyond simple purchase repetition offered key characteristics of relationship behavior since it is a variable which marketing ; every unit, activities of the firm basically consists of one definition related to are predominantly directed towards existing behavior and another related to attitude, customers, it is based on interactions and where commitment is the essential feature. dialogues and the firm is trying to achieve (Josefa and Quintana,2002). According to profitability through the decrease of most of researchers, the combination of customer turnover and the strengthening of components enables us to distinguish two customer relationships. Gummesson(1991) types of customer loyalty concepts: concluded that relationship marketing is a 1) loyalty based on inertia, where a bran is strategy where the management of bought out of habit merely because this interactions, relationships and networks are takes less effort and the consumer will fundamental issues. not hesitate to switch to another brand if there is some convenient reason to do so Marketing studies have theorized a and number of key underpinnings of relationship 2) True brand loyalty , which is a form of marketing namely, trust (Morgan and repeat purchasing behavior reflect a

798 conscious decision to continue buying owes more to positivism and inductive the same brand, and it must be a approach more to phenomenology, although accompanied by an underlying positive it is believed that such labelling is attitude and a high degree of potentially misleading and of no practical commitment toward the brand. value (Saunders,2000). Accordingly this research is positivist deductive because the 3. CONCEPTUAL FRAME WORK hypotheses are developed and a research The research approach is deductive strategy is designed to test the hypothesis. when a theory and the hypothesis ( or hypotheses) are developed and a research Based on the previous research strategy is designed to test the hypothesis, or findings, the researcher develops a it is inductive when the data is collected conceptual model, which adapted from and the theory is developed as a result of theoretical model explaining further as the data analysis. The deductive approach below.

Relationship Marketing Practices

Trust Relationship Marketing

Communication

Commitment

Conflict Handling

Intervening variable Dependent Variables Independent Variables

Figure 1: Conceptualization

799 Variables and indicators adopted for the 2. To identify which element/s of questionnaire development are as follows, relationship marketing practices are Identification of variables mostly practices in local commercial  Dependent variable banks Dependent variable is the variable of 5. HYPOTHESES primary interest to the researcher Hypotheses of this study are as follows, (Sekeran, 2007). In this study, H1: Relationship marketing practices using customer loyalty is the dependent in the bank are positively influence on variable. customer loyalty in commercial banks  Independent variables H2: Satisfaction of customer about the According to Sekaran(2007) an services provided by the bank is independent variable is one that positively affect on customer loyalty in influences the dependent variable in commercial banks either a positive or negative way. In this research Relationship marketing 6. METHODOLOGY practices are the independent variables. The population of the study consisted of the local commercial bank 4. OBJECTIVES branches that have been in operation over The main objective of the research the last two years in the Jaffna District. The is a District to examine the impact of branches of the foreign commercial banks relationship marketing practices on are not included for the study, since the customer loyalty in banking industry in empirical domain of the study is limited to Jaffna. Due to the prevailing situation in the the local commercial banking sector. The country, most of the private& foreign banks study covers both private sector as well as opened their branches in Jaffna, and still state owned local commercial banks located continuously opening branches in many in the Jaffna District in Sri Lanka. The list parts of the peninsula. This trend becoming a of registered local commercial banks in Sri threatening factor for the existing banks who Lanka whilst a comprehensive list of the running their banking business in the Jaffna number and location of branches belonging peninsula without much competition for the to each of the local commercial banks last three decades. Hence this study is operating in the Jaffna District, 170 important and suitable for this time for the household customers quato sampling banking industry in Jaffna. Furthermore, this method used and have been selected from research is aimed at achieving following 34 licensed commercial banks that specific objectives comprised of public and private bank, was 1. To investigate the degree of relationship available on the web sites of the commercial marketing practices applied in Local banks. Based on this information a commercial banking sector comprehensive sampling framework is developed as shown in the table 1.

800 Table 1- Sampling Framework (Population and Sample)

Name of the Bank (LCB) Ownership Branches Sample size Sam ple of Bra nches elements 01 Bank of Ceylon State 12 05 25

02 People Bank of Sri Lanka State 13 06 30

03 Commercial Bank of Ceylon Private 09 04 20 04 Hatton National Ban k Private 10 04 20 05 Sampath B ank Private 08 04 20 06 Seylan B ank Private 05 04 20 07 DFCC Vardana Ban k Private 01 01 05 08 NDB Bank Private 02 02 10

09 Pan Asia Bank Private 01 01 05

10 Nation Trust Bank Private 03 03 15 64 34 170

Source: Website of the local commercial banks 2013.04.10.

Data collection procedure completed questionnaires were checked The study employed both primary once more prior to computer entry to find out and secondary data sources. The secondary if there were any problems such as non data mainly consist of banks annual reports responded and missed questions. and the web sites. Further, international journals and proceedings of the conferences Validity and Reliability were helpful in formulating the research Reliability problem, reviewing extant literature and Polit and Hungler(1993) refer to developing the structured questionnaire. reliability as the degree of consistency with which an instrument measures the attribute Primary dada collected using is designed to measure. The questionnaire structured questionnaire. Questionnaires which was answered by the customers of were personally distributed by the commercial banks in Jaffna revealed researcher to the bank customers to consistency in responses. Reliability can complete. Each completed questionnaire also be ensured by minimizing sources of was checked immediately after the measurement error like data collectors bias. completion by each of the respondents. The Data collector bias was minimized by the

801 researcher's being the only one to the factors under study. To achieve content administer the questionnaires, and validity, questionnaires included a variety of standardizing condition such as exhibiting questions to measure each variable. similar personal attributes to all respondents, e.g., friendliness and support. Data Analysis The physical and psychological The Pearson simple correlation environment where data collected was made coefficients were calculated and are reported comfortable by ensuring privacy, in the correlation matrix as shown in Table 2 confidentiality and general physical below. According to Malhotra (2005) it is comfort. importance to have evidence of association among the constructs and variables of the Validity study before formally assisting the The validity of an instrument is the relationships using the regression analysis. degree to which an instrument measures Therefore, a correlation analysis was what is intended to measure (Polit & performed for fulfill the purpose of identify Hunder, 1993). Content validity refers to the strength of association among the the extent to which an instrument represents constructs and variables of the study.

Table 2 Corr elation

Loyalty Trust Commitment Communication Conflict

Loyalty Pearson 1 Correlation

Sig. (2-tailed)

N 127

Trust Pearson .826** 1 Correlation

Sig. (2-tailed) .000

N 127 127

Commitment Pearson .812 ** .486** 1 Correlation

Sig. (2-tailed) .000 .000

N 127 127 127

802

Communicati Pearson .727** .534** .372** 1 on Correlation

Sig. (2- tailed) .000 .000 .000

N 127 127 127 100

Conflict Pearson .825** .642** .630** .452** 1 Correlation

Sig. (2-tailed) .000 .000 .000 .000 N 127 127 127 127 127

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

In the table 2, all factors were Multiple regression analysis models correlated with customer loyalty and To assess the impact of the four amongst themselves. The factors with the dimensions identified in this study on highest correlation with overall customer overall customer loyalty, a multiple liner loyalty were Trust (0.826), Commitment regression analysis was performed using the (0.812), Communication (0.727) and factors score values of the dimensions as conflict handling (0.825). The correlations independent variables and overall customer between customer loyalty and all the factors loyalty as dependent variable. The of interest in this study were all positive empirical results of this multivariate indicating that there was a positive analysis are shown in Table 3 below. association and relationship between customer loyalty and all its determinants identified in this research.

Table 3 Predictor of Loyalty Model Summary

Details Trust Commitment Communication Conflict Handlin g

Loyalty 16.405 16.797 19.325 (.000) (.000) (.000)

803

Constant 3.112 2.191 1.233 1.185

(P=. 823) (P=.537) (P=323) (P=.231)

R 0.826 0.95 0 0.988 1.000

R2 0.683 0.903 0.976 1.000

Adjusted R2 0.680 0.902 0.975 1.000

Standard 0.50 0.32 0.16 0.00 Error

F Value 269.113(.000) 578.234(.000) 1667.823(.000)

Note: Figure in the Parentheses indicate P- value

The specification of the four model 3, F-value is 1667.823 and respective variables such as Trust, Commitment , P value is 0.323, p < 0.01 which statistically Communication and conflict handling in significant (0.000) level. Model 4, the above model revealed the ability to respective P value is 0.231, p < 0.01 which predict loyalty (R2 = 0.683; 0.903; 0.976 and statistically significant (0.000) level. 1.000 respectively). In this model R2 value of above four ratios denote that 68.3%; 7. CONCLUSION AND PRACTICAL 90.3%; 97.6% and 100% to the observed IMPLICATIONS variability in loyalty. The remaining 30.7%; The core purpose of the study was 9.7% and 2.4% are not explained. An investigated how relationship marketing examination of the model summary in practices implement in commercial banks in conjunction with ANOVA (Fvalue) Jaffna affected their loyalty. The ultimate indicates that the model explains the most objective of the research is to examine the possible combination of predictor variables impact of Relationship Marketing Practices that could contribute to the relationship with (RMP) on Loyalty in Jaffna licensed the dependent variables. For model 1- F commercial banks. This is supported with value is 269.113 and respective P value is Chantal Rootman (2006) who concluded 0.826, p < 0.01 which is statistically that there is a positive relationship between significant (0.000) level. Again considering customer Relationship and Loyalty. The model 2- F value is 578.234 and respective P regression result shows that there is a strong value is 0.537, p < 0.01 which is statistically positive impact of RMP on Loyalty. It means significant (0.000) level. On the other hand, that RMP has strong positive effects on the Loyalty in Jaffna licensed commercial

804 banks. Hypothesis (H1) has been accepted. Gronroos, C. (1989) Defining marketing: a The existing literature on the m a r k e t - o r i e n t e d a p p r o a c h . relationship marketing and customer loyalty European Journal of Marketing, has identified a positive relationship Vol. 23 No. 1, pp. 52-60. between relationship marketing and Grönroos, C. (1990) Service Management customer loyalty. But there is no clear and Marketing, Lexington Books, evidence about relationship between Massachusetts,USA. Relationship marketing and customer loyalty on the service industry in developing Grönroos, C. (1990) Relationship approach countries. This study tried to integrate the to the marketing function in service relationship between relationship marketing contexts: the marketing and and customer loyalty in Commercial organizational behavior interface Banking industry in Jaffna. Thus, it filled Journal of Business Research, Vol. the theoretical gap with empirical findings 20 No. 1, pp. 3-12. by providing the answer relationship Gwinner, K.P., Gremler, D.D. and Bitner, marketing positively affect on customer M.J. (1998). Relational benefits in loyalty in service firms in developing services industries: the customer's countries. Furthermore bonding also had the perspective. Journal of the higher regression coefficient value. It Academy of Marketing Science, shows, bonding with customers has the Vol. 26 No. 2, pp. 101-14. strong positive influences on Loyalty. Opara, B.C., Olotu, A.O. and Maclayton, D.W. (2010) Analysis of Impact of REFERENCES Technology on Relationship Barnes, J. (1994) Close to the customer but Marketing Orientation and Bank is it really a relationship?. Journal Performance. European Journal of of Marketing Management, Vol. 10 Scientific Research, Vol.45 No.2 No. 6, pp. 561-70. (2010), pp.291-300. Barwise, P. (1993) Brand equity: snark or Pitta, D.A. and Kastsanis, L.P. (1995). boojum?. International Journal of Understanding brand equity for Research in Marketing, Vol. 10 successful brand extension.Journal No. 1, pp. 93-104. of Cunsomer Marketing, Vol. 12 No. 4, pp .51-64 Chang, A. and Tseng, C. (2005) Building c u s t o m e r c a p i t a l t h r o u g h Antreas, D. A. (2000) Customer Satisfaction relationship marketing activities- A C u e s To S u p p o r t M a r k e t case of Taiwanese multilevel Segmentation and Explain marketing companies. Journal of Switching Behavior, Journal of Intellectual capital, Vol. 6 No. 2 pp Business Research, 47, 191207. 253- 266.

805 Age of the Consumer and Service Quality, relationship marketing”, 1993 Dr.R.P.C.Ranjanee, The Dean, AMA Educators' Proceedings: Faculty of Commerce and E n h a n c i n g K n o w l e d g e Management Studies, University of Development in Marketing, Vol. 4, Kelaniya. AMA, Chicoga, IL, pp. 232-3. Central Bank of Sri Lanka (2010), Annual Zeithaml, V.A. (1981) How consumer Report, Central Bank of Sri Lanka evaluation processes differ between Sweeney, J.C. (2001). Inter- relationships goods and services in Donnelly, J.H. between relationship marketing, and George, W.R. (Eds), Marketing b r a n d i n g a n d s e r v i c e s : of Services, American Marketing implications. University of Western Association, Chicago, IL. Australia., Available from So, S.L.M and Speece, M.W. (2000) http://smib.vuw.ac.nz:8081/WWW Perceptions of relationship /ANZMAC2001/anzmac/AUTHO m a r k e t i n g a m o n g a c c o u n t RS/pdfs/Sweeney1.pdf. (Accessed managers of commercial banks in a 3 August, 2009) Chinese environment International Smith, T.F. and Johnson, R.L. (1993) Journal of Bank Marketing, Vol. 18 Facilitating the practice of No. 7, pp. 315-27

806 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 807-816

THE IMPACT OF PROMOTIONAL MIX ELEMENTS ON BRAND EQUITY: BANKING SECTOR. (BANKS IN JAFFNA PENINSULA)

K. Dilogini Kurunathan1 and H.H.Grace2

Abstract

Brand equity is an intangible asset built up by company overtime by building awareness, having a well-known name or a clear identity, consistent communications, marketing to the consumer, acting socially responsible, and spending on advertising and promoting the brand.Brand equity is one of the most important elements in business world today. It describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well- known name. Among numerous research subjects about brand equity, the most popular one is the relationship between the brand equity and the promotional mix. Promotional mix is a term used to describe the set of tools that a business can use to communicate effectively the benefits of its products or services to its customers. The purpose of this study is to investigate the effects of promotional mix on equity of brands performing in the banking sectors. Data was collected through a five points Likert type summated rating scales of questionnaire. A sample of one hundred and fifty customers were surveyed from banking sectors Such as Bank of Ceylon, Commercial Bank and HSBC which are public, private and international banks respectively. Systematic random sampling has been exercised. Correlation and regression analyzed has been employed.

Keywords: Promotional mix, Brand equity, Brand imag.

1. INTRODUCTION researchers have done research studies on Today's business atmosphere is a brand and brand equity. They are interested dynamic and competitive one where the in the studies of brand equity because it business enterprises have to adopt so many creates the value not only to the customers different types of strategic tools to survive in and the enterprise but also to the the changing market. The business shareholders, managers and personnel. environment has major impact in building Because brand equity is a value creating the brand and brand equity. Many factor which leads to the success of the

1. Student, Faculty Of Management Studies & Commerce, University Of Jaffna [email protected] 2. Student, Faculty Of Management Studies & Commerce, University Of Jaffna. [email protected] 807 company (Schultz 1998). Brand equity is the 2. RESEARCH PROBLEM worth possession to the company because of During the post war situation in Sri its stability and durability (Zeinolabedin et Lanka, especially in the Northern part there al, 2012). have been many developments taken place. Significantly the banking sector has major Brands are specially vital in the changes in Jaffna Peninsula. Opening of new service sector, since service consumers meet branches, introduction of new commercial with more complicated issues than in other banks to Jaffna district made high sectors (Bharadwaj et al, 1993). But they competitiveness among numerous banks. To concern on brand valuation of market share sustain in the market, the banks need to rather than brand equity (Ambler 2003). a d o p t s o m e k i n d s o f s t r a t e g i e s Banking sector is an important industry in (S.Sivesan&S.Achchuthan 2012). Brand is Sri Lanka. Mostly the banks are fighting one of the important element which with each other to get the higher market differentiate one from another. Though the share with the globalization effect. banks have their own brand, they do not know how to enhance the brand equity or But in Jaffna Peninsula, there are how to add value to the brand equity in a lack of researches on the topic of brand and proper way which means through brand equity. It is a crucial part to do a promotional mix elements. research as it is a motivational factor especially in service sectors such as banks. A study on the impact of Those factors are financially based promotional mix elements on brand equity motivation and strategy based motivation. on banking sector in Jaffna will be a Financially based motivation helps to productive empirical task. Moreover, there evaluate the market share which enables the are not much empirical studies on the company in decision making regarding the impacts of promotional mix on brand equity share price and dividend. Strategy based to banking sector in Jaffna district. motivation helps to enhance the marketing Therefore, it is essential to have an empirical productivity through strong brand. Opening research on the actual impact of promotional of new branches, new banks, high mix on brand equity. So the end findings will competition among them, different means of support the banks to set-up a well-designed service providing and the switching investment on promotional mix to improve behavior of customers are some aspects of the value of brand equity. strategy based motivation in banking sector. RQ:- What extent the promotional mix For our research purpose we selected three impact on brand equity in banks in Jaffna banks in Jaffna. They are Bank of Ceylon, district, Sri Lanka. Commercial bank, and HSBC which are public, private and foreign banks Objectives respectively. The main objectives of the study is to find out the impact of promotional mix on brand equity in banks in Jaffna district, Sri

808 Lanka and secondary objectives are: A blend of brand consciousness, brand To identify the promotional mix in union, perceived quality, other propriety commercial banks in Jaffna district brand assets called as brand equity (Aaker To find out the relationship between 1991). promotional mix and brand equity To suggest the banks to have effective Keller (1993) stated that brand promotional mix equity includes the brand knowledge with To suggest the bank to keep brand equity the above mentioned aspects. High level of through effective promotional mix brand equity increases consumer satisfaction, repurchasing intent and degree of loyalty. Though there are so many 3. REVIEW OF LITERATURE elements in brand equity, first of all the Promotional mix is the blend of brand managers should take steps to make advertising, sales promotion, public brand awareness and brand image (Edo Rajh relations, personal selling and direct selling 2005). There are notable inter correlations among the dimensions of brand equity that a company uses to communicate brand (YooDonthu& Lee 2000). Brand awareness benefit or value and develop relationships and brand image are different dimensions of (Kotler& Armstrong 2008). Promotional brand equity. Higher brand awareness and its mix is the important tool between the service optimistic brand image improves the brand providers and the customers in building up a equity (Keller 1993:1998). There is a strong relationship among them. It is the stimuli relationship between the peoples/consumers factor to the service consumers. Generally perceived quality and educational managers focus on promotional mix as a qualification (Dr.Haresh and B.Vaishani traditional way. But it won't be suitable for 2012). Weak/ low brand equity cause slump the present dynamic business environment. in sales flow and strong brand equity raises So they should adopt the right promotional the company's revenue (Hong-Bumm, Woo mix at the right time which should be &Jeong 2003). suitable to the business and it must promote the outcome of the business (S.Sivesan Promotional mix and brand equity has a close relationship in all business 2013). During the research studies in 1974, it sectors. Companies should concern on has been stated that heavy advertising selecting the specific marketing mix improves perceived quality (Nelson 1974). elements, in order to prevent the erosion of Sales promotion is for a short term period. existing brand equity (Dr.Sc.EdoRajh This seems to be a curb in the promotional 2009).Promotional mix gives the added mix for a company. Even though value to the brand equity. The brand equity ZeinolabedinRahmani (2012) suggested value depends on consumer behavior. When that sales promotion is a strong way to brand equity value increases the consumer enhance brand equity. The managers should behavior shows a positive sign on the other apply this for the long term goals also. hand if the brand equity value declines the

809 consumer behavior shows a negative sign. order to stimulate trial, increase consumer All the businesses must have competitive demand or improve product availability. advantage in order to survive in the market (American Marketing Association) for a long period.Brand equity gives competitive advantage to the companies in a Public relation - greater value. Public relation is a management function which tabulates public attitudes, In order to make brand awareness defines the policies, procedures and interest most of the companies do advertising as it's a of an organization followed by executing a best tool in promotional mix which creates program of action to earn public awareness among public (Krishnan understanding and acceptance. (Edward &Chakravarti 1993). Most of the Bernays) researchers have found out that promotional mix has a positive impact on brand equity. Personal selling - But Edo Rajh (2005) stated some aspects of Personal selling is the oral marketing mix can negatively affect the presentation in a conversation with one or creation of brand equity. So he suggested to more prospective purchasers for the purpose select the appropriate marketing mix to of marketing sales. (Philip Kotler) avoid the deterioration of brand equity. Long term well-configured strategic financial Direct selling - decision in promotional mix will increase Selling goods or services person to the value of brand equity. Making brand person outside a fixed retail location. Direct awareness is easy compared to brand image. selling includes door to door solicitation, Therefore managers should invest well in home parties and contacting potential promotional mix (Zeinolabedin et al, 2012). customers via the telephone.

The Dimensions of The Promotional Mix. Advertising - 4. METHODOLOGY Advertising is a paid of non- Research Model and Hypotheses personal communication of ideas, goods and The aims of this study is using services by an identify sponsor. (Philip SERVQUAL model, we examined Kotler) significant differences in the five promotional mix dimensions (Advertising, Sales promotion Sales promotion, Public relations, Personal The media and non-media selling and Direct selling) and we examined marketing pressure applied for a the impact of the five promotional mix predetermined, limited period of time at the dimensions on brand equity of banking level of consumer, retailer or whole seller in sectors (see Fig. 1).

810

PROMOTIONAL MIX BRAND EQUITY

Advertising Brand awareness

Sales promotion Brand image

Public relation Brand loyalty Personal selling Perceived quality

Direct selling Brand associations

Fig. 1: Research Framework

The Five Hypotheses are as follows: of the instrument used.Afsar (2009) has H1: Advertising have a significant impact on suggested 0.60 as the acceptable level for brand equity. reliability measure. Alpha values ranged H2: Sales promotion have a significant from 0.701 to 0.901, thus indicating an impact on brand equity. acceptable level of reliability. H3: Public relations have a significant impact on brand equity. Nunnally (1978) gave the alpha standard for H4: Personal selling have a significant reliability. He ended up with the following:- impact on brand equity. 1. Early stage of research alpha= 0.5 to 0.6 H5: Direct selling have a significant impact 2. Basic research alpha= 0.7 to 0.8 on brand equity. 3. Applied settings alpha= 0.8 to 0.9

5. DATA ANALYSIS AND RESULTS Our research study, we received the Data Collection results for the elements we propose in The primary and secondary data promotional mix. Advertising, sales were collected for the survey. Primary data promotion, public relations, personal were collected through questionnaires and selling, direct selling are the elements we secondary data were collected from books, took into consideration. For all these 5 journals and internet. elements we received the results between 0.7 to 0.8. Reliability Cronbach's alpha reliability Our results for the overall brand analysis was conducted on the independent equity is .901 which is justifiable. variables in order to determine the reliability (See table 1)

811

Item-Total Statistics Table 01

Scale Mean Scale Corrected Squared Cronbach's if Item Variance if Item-Total Multiple Alpha if Item Delete d Item Deleted Correlation Correlation Deleted Advertis ing 122.9 8 636.437 .614 .458 .724 Sales promoti on 121.7 7 606.785 .741 .691 .701 Public relati on 122.4 2 603.312 .727 .690 .701 Personal selli ng 120.4 6 618.206 .776 .633 .705 Direct selling 121.92 621.156 .708 .630 .710

Brand equity 58.46 255.021 .646 .480 .901

Correlation Analysis relationship between the variable based on The research is undertaken to find the value of correlation. out the relationship between promotional Correlations Between promotional mix and brand equity. Correlation analysis mix elements and Brand equity are was carried out to find out the nature of presented below:

Table 02 Correlations matrixe s Brand Sales Public Personal Direct equity Advertising pro motion relatio n selling selling Brand eq uity Pearson Correlati on 1

Adverti sing Pearson Correlati on .483** 1

Sales promot ion Pearson Correlati on .559** .524** 1

812 Public relat ion Pearson Correlati on ** ** ** .528 .590 .785 1

Personal sell ing Pearson Correlati on ** ** ** ** .663 .492 .699 . 667 1

Direct sel ling .511** .628** .700** . 708** .655** 1 Pearson Correlati on

**. Correlation is significant at the 0.01 level (2-tailed).N is 136.

Table - 02 indicates that Commercial Bank, and HSBC).Here promotional mix and brand equity are Promotional mix is the independent variable significantly correlated at 0.01 significance and brand equity is dependent variable. level. The correlation between the promotional mix and brand equity has strong In our research, we could able to positive relationship. The results of all notice that the banks brand equity is promotional mix elements correlation range influenced by promotional mix by 46.0%. is between +0.40 to +0.69. The remaining 54% is decided by the other factors/points. Regression Analysis Regression analysis was carried out Thus the regression result are to the test the impact of promotional mix and presented below: brand equity in banks (Especially BOC,

Table 03 Model Summa ry

Adjusted R Std. Error of the M odel R R Square Square Estimate 1 .69 3a .48 0 .460 10.663 a. Predictors: (Constant), DI, AD, PE, SP, PU b. Dependent variable: brand equity

813 Table 04 Coefficientsa

S tandardized Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig. 1 (Cons tant) 35.59 8 3.779 9.420 .000 Advert ising .7 20 .331 .184 2.178 .031 Sales promo tion .4 80 .420 .129 1.141 .256 Public rela tion .0 10 .406 .003 .024 .98 1 Personal selling 2.056 .395 .494 5.198 .000

Direct sellimg -.077 .409 -.020 -.188 .851

a. Dependent Variable: Brand equity

According to the table 04, advertising and personal selling hypotheses The research result states that the are accepted where we can see the results potential researchers should consider the between 0.00 to 0.05. On the other hand other service sectors in Jaffna Peninsula sales promotion, public relations & direct while evaluating the impact of promotional selling hypotheses are rejected where the mix elements on brand equity. results are more than 0.05. The outcome of this study shows 6. CONCLUSION AND SUGGES- some limitations. One is, the five elements in TION promotional mix have been taken into In our research study, based on consideration. Therefore in the future, the regression results, Hypotheses 1 and 4 were researchers should be vigilant in taking into supported. But Hypotheses 2, 3 and 5 were account of the other promotional mix rejected. The finding of our empirical study elements as well. has authenticated a significant positive relationship between the two elements of . The other limitation is that the promotional mix and brand equity. They are sample is geographically limited. The advertising and personal selling. The other research has been done only in Jaffna three components like sales promotions, district. It can be done in other parts of the public relations & direct selling did not show country or for the whole country. significant impacts.

814 And the questionnaires were given Bottom Line: Creating the to 150 respondents in 3 banks only. It is also Measures of Success, Financial can be widen to a large number of Times/Prentice Hall, London. respondents in several other banks as well. Bharadwaj, S.G., R.P. Varadarajan and J. F a h y, 1 9 9 3 , “ S u s t a i n a b l e According to this research outcome, Competitive Advantage in Service it shows that the promotional mix has 46% Industries: A Conceptual Model and positive impact on brand equity. The banks Research Proposition”, Journal of in Jaffna district have good knowledge in Marketing, 57(4), pp. 83-99. advertising and personal selling where they BoongheeYoo, Naveen Donthu&Sungho fail to improve sales promotions, public Lee, 2000, “An Examination of relations and direct selling. These three Selected Marketing Mix Elements factors should be developed in the banks. By and Brand Equity”, Journal of the allocating funds to those elements, giving Academy of Marketing Science knowledge to the employees about the 2000; 28; 195. promotional mix the banks can improve the BoongheeYoo, Naveen Donthu and Sungho promotional mix aspects which gives major Lee, 2000, “An examination of impacts on brand equity. selected marketing mix elements and brand equity”, Journal of the Advertisement helps to build up academy of marketing science, Vol positive brand image and awareness. Jaffna 28, No 2, pp.195-211. people spend time with television, radios, D r . s c E d o R a j h a n d D r . s c newspapers and other social networks. So DurdnaOzreticDosen, 2009, “The the banks can easily capture the customer effects of marketing mix elements base through advertising. Personal selling on service brand equity”, UDK has the direct relationship with the 658.626:339.138. customers. Tele banking is an example for Edo Raj,2005, “The effects of marketing personal selling. It helps to have a good mix elements on brand equity”, relationship for a longer period with the Research associate, The institute of customers. These two are good ways for economics, No 102, pp.30-59. improving the brand equity. Isabel Buil, Leslie de Chernatony and Eva All in all, the banks must have Martimez, 2010, “The effect of strategies and business decisions in advertising and sales promotions on choosing good promotional mix which leads brand equity”, Leaders in brand to the enhancement of brand equity of the m a n a g e m e n t i n t e r n a t i o n a l institution. conference. K e l l e r , K e v i n L a n e . 1 9 9 3 . REFERENCES “Conceptualizing, Measuring, and Aaker DA (1991).”Managing brand equity”, Managing Customer Based Brand New York: The Free Press. Equity.” Journal of Marketing 57 Ambler, T. (2003) Marketing and the (January):1-22.

815 Kotler, P. (2003). Marketing Management. Thanmaychattopadhyay, SharaddhaShivani Upper Saddle River, New Jersey: and Mahesh Krishnan, 2010, Pearson Education. “ M a r k e t i n g m i x e l e m e n t s Nelson, P (1974). “Advertising as influencing brand equity and brand Information,” Journal of Political choice”, VIKALAPA. Vol. 35 No 3. Economy, 82(4), 729-754. Yoo,B., and Donthu,N, 2002, “Testing cross S.Sivesan&S.Archchuthan, 2012, “How cultural in variance of the brand relationship marketing contributes equity creation process”, Journal of to gaining customer loyalty to product and brand management, banking industry in Sri lanka”, 11(6), 380-398. Asian journal of multidimensional Z e i n o l a b e d i n R a h m a n i , research, Vol.1 issue 3. HamidrezaSalmaniMojaveri and S.Sivesan, 2013, “An empirical study on the Amin Allahbakhsh, 2012, “Review promotional mix and brand equity : the impact of advertising and sales mobile service providers”, Herald promotion on brand equity”, journal of marketing and business Journal of business studies management, Vol.2 (1), pp.047- quarterly, Vol.4, No.1, pp. 64-73. 050.

816 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 817-821 ROLE OF FACTUAL EVIDENCE AND EXPERIENCE ON INTUITION AND STRATEGIC MARKETING DECISION MAKING

Anita Basalingappa

Abstract

Corporate world largely relies on empirical evidence for decision making. Decision making is a cognitive process resulting in the choice of a particular course of action from among options available. Strategic marketing decision making has never been easy. Strategic marketing decisions are best taken in a scenario where all or most relevant data is available which is ideal. Most of the times there is lack of information for empirical or factual decision making. It is best then to rely on intuition based decision making. Intuition has also been a key ingredient of decision making for managers in times when most relevant data is available. This research presents strategic marketing decision making based on intuition with some factual evidence versus intuition based on prior knowledge of the market.

Keywords: Cognitive, Decision Making, Marketing Strategic,

1. INTRODUCTION intuitive decision making as more creative In the Morden business world most and rewarding, there is a premium to rational of the Most studies (Betts, 2009; Dane et. al., decision making and experience. However 2007; Miller et. al., 2005; Dane et. al., 2004; each of them is intertwined. It is not that Sagler-Smith et. al., 2004; Bonabeau, 2003; organisations have a choice between Loewenstein, 2001; Behling et. al., 1991; intuitive and factual evidence based decision Simon, 1987; Agor, 1984; Roberts, 1857) making. Most of the times organisations have shown the increasing reliance of cannot afford to take decisions based on intuition in decision making. Simultaneo- rational decision making as relevant data is usly organisations are demanding rationale not always available in totality and or on behind decisions as performance based time. Organisations make decisions by one decision making is on the rise in strategic of the two ways: 1) Intuition based factual marketing decision making companies. evidence 2) Intuition based on prior Business management schools focus more experience in other markets. Students who on courses that train participants in rational study in business schools are exposed to decision making rather than intuitive strengths and weaknesses of intuitive and decision making. Though studies prove factual evidence and prior experience based

Associate Professor, Marketing Area & Chairperson Admissions Mudra Institute of Communications, Ahmedabad (MICA) India [email protected], [email protected] 817 decision making. This research attempts to participating in marketing simulation understand from a business school student's exercise in management institutes across point of view, the role of factual evidence three years. The marketing simulation and experience on intuition and strategic course is based on MARKSTRAT. The marketing decision making. questionnaire was administered after the students went through four days of 2. RESEARCH METHODS marketing simulation on campus. 47% of the The proposed relationship between respondents had upto 3 years of work strategic marketing decision making, experience. And 9% of the respondents had intuition, factual evidence and experience more than 3 years of work experience. The was tested based on 398 respondents. The gender and education of the sample are as in sample was drawn from student population 'Table 1: Sample size and characteristics'. Table 1: Sample size and characteristics

Total # Gender Education Female Male Arts Commerce Science Masters No 174 81 93 30 67 62 15 experience Upto 3 188 70 118 14 30 121 14 years More than 36 10 26 1 15 13 7 3 years

Total 398 161 237 54 112 196 36

The scale was developed based on Results unstructured interviews with managers and The proposed model is as in 'Figure 1: literature review. The multiple item scales Proposed path model'. (See Appendix for Operationalisation of variables) were assessed by calculating the Figure 1: Proposed path model Cronbach Alpha coefficient. These multiple item measures were also factor analyzed to understand the items loading on each factor. LISREL 8.54 version software was used for testing relationships in the proposed model.

The proposed structural model for this research has three exogenous (independent) constructs and one The model converged with the following fit endogenous (dependent) construct. The measures: exogenous constructs are Strategic RMSEA: 0.064 marketing decision making, factual df: 31 evidence and experience. Intuition is the Chi square: 80.93 endogenous construct. P value: 0000

818 GFI: 0.96 Hence it can be concluded that the model fits CFI: 0.88 well and represents a reasonably close approximation. Another indication that the model fits well is The results indicate that intuition that the expected cross validation index influences strategic marketing decision (ECVI) for the model (0.32) is almost making through factual evidence. (Table 2: nearing (if not lesser than) than ECVI for the Results of the tested hypotheses, Table 3: saturated model (0.28). The confidence Structural equations and Figure 2: Structural interval for ECVI is from 0.27 to 0.40. model and Figure 3: Full path model).

Table 2: Results of the tested hypotheses

Link Expected Standardised T-value Result Sign Estimate H1 Experience - Strategic + 0.61 0.36 Partial support: marketing decision making H2 Factual evidence - + 0.89 3.97 Full support: sign Strategic marketing as well as decision making estimate H3 Intuition - Experience + 0.76 0.36 Partial support H4 Intuition - Factual - -0.30 -2.68 Full support: sign evidence as well as estimate Table 3: Structural equations

SMDM = 0.89*Factual Evidence + 0.61*Experience, Errorvar.= 0.086, R² = 0.91 (0.22) (1.68)

(0.26) 3.97 0.36 0.33

Factual Evidence = - 0.30*Intuition, Errorvar.= 0.91 ,R² = 0.090 (0.11) (0.29) -2.68 3.11

Experience = 0.76*Intuition, Errorvar.= 0.43 , R² = 0.57

(2.08) (2.36) 0.36 0.18

In parentheses are the standard error values and below the parentheses are the t-values

819 Figure 2: Structural model

Figure 3: Full path model

(Refer to item code description in Appendix B: Operationalisation of variables)

820 References References will be made available on request.

APPENDIX A: Operationalisation of variables

Construct Number Measures Item code in Cronbach’s Scale of items path analysis Alpha in each construct Intuition Intuition 0.826 2 1. Use of intuition based data Q5_1 5 point scale Q7_1 5: Very high, 1: Very low

Factual Factual 0.788 evidence 2 1. Use of factual data in Evidence 5 point scale Q4_1 5: Very high, Q6_1 1: Very low

Strategic SMDM 0.851 marketing 3 3. Ability to understand and Q1_1 5 point scale decision Q2_1 5: Very high, making Q3_1 1: Very low

Experience Experience 0.701 2 1. Do you consider yourself a Q8_1 5 point scale Q9_1 5: Definitely yes, 1: Definitely no

821

Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 822-828 ENTERTAINMENT AREA AND ITS RELEVANCE IN INDUCING PESTER POWER A STUDY WITH REFERENCE TO CHIC KING OUTLET

Hari Sundar.G.Ram1 and D.Sudharani Ravindran2

Abstract

Kids mean business to marketers. Children have a big say in family decision to purchase many products. Marketers are trying to encash on the children's ability to nag their parents to induce purchase. A lot of marketing and advertising activity is aimed at children. Kids are increasingly influenced by commercialisations that often go against what parents are trying to do. The average family size in India is on a decline coming in now at almost 4. Rapid economic growth has resulted in greater incomes for the booming middle class. The eating out fast food culture which was predominantly a western lifestyle is fast catching up in India especially in the state of Kerala. A growing NRI population, high brand awareness among adults and children has led to a mushrooming of several Domestic, National and International eateries. Eating out being basically a family impulse decision, kids have major say in it. Fast food outlets are targeting kids by kids meal promos, toy promos, gifts, events and entertainment areas to draw their attention. Pester power is all the more relevant now. The study investigates the use of entertainment area at ChicKing outlets to induce pester power.

Keywords: Pester power, Entertainment area, Fast food outlets, Sales promotion, Kids

1. INTRODUCTION government the power of pester is all the Pester power is a Childs ability to more relevant today. A child is pampered affect their parents marketing decision, often usually by father, mother, grandparents (4), through the use of nagging or pestering. uncles, aunts etc. With both parents working (Wikipedia). Sheth G. et.al.(2008) defined the lack of quality time to spend with pester power as “the nagging ability of children is usually replaced by showering children to purchase the product they desire gifts and also giving in to their demands. due to some reason”. Pester Power is a term Internet and television have loaded the used to define a child's influence over the children with information from marketers on parent in the buying process (Turner et al, what they want. This coupled with the habit 2006). of taking out children for family shopping directly puts the kids at the mercy of the With the advent of nuclear families marketers advertising strategies. and family planning efforts of the Information gained from advertisements has

1. Associate Professor, Dept of Management Studies, SNGCE, Kolenchery, Kerala, [email protected] 2. Professor, PSG Institute of Management, Coimbatore 822 made kids more knowledgeable than parents In their study Mark.D.Jekanowski on product features and hence, their pester or ,James.K. Binkly and James Eales., (2001) nagging cannot be simply put away. With states the demand for fast foods depends high levels of disposable income parents heavily on the demand for convenience. An give into the demands of their children, since increase in the number of fast food outlets in the process of fending of demand is time a market directly increases quantity consuming. Also the guilt factor of not able consumed by decreasing the cost of to spend quality time with kids adds fuel to obtaining a fast food meal. Thus it is the power of pester. observed that a number of look-alike fast food outlets with similar names have ChicKing offers the complete dine- mushroomed. in experience offering crumb fried chicken, the showrooms usually spread over 800 to Blattberg and Neslin (1990) defines 2000sq ft has a considerable area marked as sales promotions as an “action-oriented Play area with toys for kids' entertainment. marketing event whose purpose is to have a They claim to offer a complete experience direct impact on the behaviour of the firm's full of fun, food and relaxation. customers”. From the definition, it would be reasonable to conclude that fast food 2. OBJECTIVES OF THE STUDY companies employ strategies other than food  The current research is focussed on marketing to create consumer reaction to studying whether the presence of purchase their brand. Furthermore, the entertainment area helps in inducing central role of marketing is to create value pester power to draw kids and their for its chosen customer (Silk, 2009). In the family to fast food outlets (Pester power case of entertainment or play area for kids, on adult decision making) ChicKing offers the customer added value  It focuses on whether pester power by providing children with fun and an increases repeat customer walk-ins enjoyable experience.  The study would enable marketers to decide on whether to provide price Robert Mayer (1994) has stated that discounts, freebies or kids entertain- children not only attempt to influence their ment in planning marketing activities. parents to make purchases of products of  It would help fast food outlets in special interest to them, but also products of identifying their retail target audience. remote interest. Thus it may some time be  The researcher also tries to examine the that though the kid's do not want the fried sensitive issue of rising consumerism in chicken they may sometime lead the parents children to the store for the entertainment area alone.

3. LITERATURE REVIEW Fischer et.,al. (1991) had found that Numerous studies have been done children as young as three recognised brand across the world to demonstrate how pester logos. According to Horgan Sheena (2005) power is a major decision maker.

823  Children at 18 months can recognise with improves his position in the peer group corporate labels and the child's esteem substantially.  Children as young as two years make consumer choices Kaur et.al, (2006) found that for  By two to three years can draw brands some of the products the kids are active  By four years have developed consumer initiators, information seekers and buyers, preferences and use information from whereas for some other products, they are advertisements to develop these influencers who lure their parents into  five years actually purchased brands becoming buyers. In the case of eating out at fast food outlets the kids serve the dual roles. From Fischer et.al. (1991) and Horgan Sheena (2005) it is evident that kids Deval Godhani, Divyesh Khant and preference or pester for fast food outlets is Ashwin Jadeja(2012) state that parents not any look-alike one but particular and found the practices adopted by marketers as specific choice. unethical.

Claire Lambert and Richard Kadambini Katke(2007) sates Mizerski(2011) found that toy premiums television pumps in lot of junk food and tended to reinforce loyalty to restaurants. snack advertisements. Indian child on an average get exposed to not less than 20 Swathi Soni & Markarand attractive messages of these product. More Upadahaya(2007) have found that top five time spent with television viewing more products for which kids have pestered their exposure to these messages (repeat parents include Fast food restaurants, Own advertisements message result into placing clothing, Chips , Chocolates and Games & the brand on top of the mind) will result into toys. ChicKing Outlets having four of the buying the brand illustrated in the five top pestered products gives it a visible advertisements. advantage to attract kids. Her study also reveals that most of Margaret, Anne Lawlor and Andrea the time children determine the family Prothera(2010) suggested that children budget. There is greater influence on food understand the various responses that items and toys. parents make to purchase requests , for example, agreement, refusal, procrastina- 4.0 RESEARCH METHODOLOGY tion and negotiation and their parents nature Descriptive research was carried of such responses. They thus suggest that out to find out the pestering effects of pester power has a healthy effect on child children to induce purchase. The research parent relation. survey was conducted at 3 major outlets of ChicKing located at Ernakulam district. A Dammler (2005) has found that a sample size of 45 respondents who were brand with which a child gets influenced accompanied with children in the age group

824 of 3 to 6 years was surveyed. Children in this second variable. Pearson's r is 0.831. This age group were selected because the number is very close to 1. For this reason, we entertainment area at ChicKing consisted of can conclude that there is a strong toys for children in this age profile. The relationship between play-area and the child respondents were personally interviewed accompanying the meal buyer with a structured questionnaire. Since a personal interview technique was used only 2. H0: The presence of children in-store traffic was sampled. Due to the accompanying adults will make no constraints of time convenience sampling difference in their purchase technique was used 15 people accompanied Ha: Respondents with children by children in the age bracket of approx 3 to accompanying them will report higher 7, at each outlet that consented to the survey purchase were interviewed. Respondents were interviewed over the weekend at evenings to get a proper representative sample.

5. ANALYSIS OF THE DATA Various hypotheses were assumed **. Correlation is significant at the 0.01 to carry out analysis of the data. The set of level (2-tailed). hypothesis was then checked using statistical tests. Pearson's r is 0.885. This number 1. H0: The presence of a play area will is very close to 1. For this reason, we can have no influence on the child conclude that there is a strong accompanying the meal buyer Ha: The presence of a play area will be relationship between the childs time positively associated with the child spent at play-area and the adult waiting accompanying the meal buyer for the child making higher spends.

3. H0:Presence of play area does not make children frequent the same outlet Ha: Presence of play area makes children insist on the same outlet **. Correlation is significant at the 0.01 level (2-tailed)

This means that there is a strong relationship between the two variables. This means that changes in one variable is **. Correlation is significant at the 0.01 strongly correlated with changes in the level (2-tailed).

825 Pearson's r is 0.815. This number is This is a negative correlation. very close to 1. For this reason, we can This means that as one variable conclude that there is a significant increases in value, the second variable relationship between Play area and kids decreases in value .We could conclude insisting on the same fastfood outlet. that since people tend to perceive Thus the child is brand conscious. crumbed chicken as unhealthy they tend to spend less. But the power of pester 4. H0: There is no significant still makes purchase inevitable. relationship between entertainment area and pester power at fastfood outlets Ha: There is a significant relationship between entertainment area and pester power at fastfood outlets

**. Correlation is significant at the 0.01 From the mean study it is evident that

level (2-tailed). playarea has the highest mean followed byinsisting of kids which has the highest Pearson's r is 0.776. This influence on pester power and purchase number is very close to 1. For this pattern of adults with kids. reason, we can conclude that there is a significant relationship between 6. CONCLUSIONS entertainment area for kids and pester From the analysis of data the power at fast food outlets. following results and suggestions can be summed up Healthy vs Junk food Convenience of location of and the mushrooming of outlets has created a fast food culture in the state which has made kids susceptible Children have a considerable say in making eating out **. Correlation is significant at the 0.01 decisions for the family and also are level (2-tailed). very brand loyal. Kids recognise brands and insist on ChicKing outlets. They

826 also are seen rushing to the play area as should introduce healthy alternative soon as they enter the store. Hence snacks to tap on the increasing health marketers of fast food should increase aware consumer. the overall ambience to make the outlets catchy to the child. Pester power is a very important tool and plays a considerable roll in Kids do not give much creating purchase. importance to the food that is served and are keener on the entertainment It is also observed from the provided. They are solely attracted by analysis of the questionaire and the play area and consider the eating out personal interview that there is a only as an excuse to draw the parent to growing trend in child consumerism. the outlet. Marketers can design outlets Advertisements targeting kids, single based on cartoon characters and should kid double income families, lack of organise theme parties for kids on quality time of parents, sentimental weekends and holidays to draw them. spends etc are raising child Price discounts do not make any change consumerism which seems to be a in purchase of fast-food for parents with dangerous trend in child upbringing. kids. Parents offer a visit to fastfood The parent usually tends to order outlets as a reward for doimg good. This or eat more to give the child ample time concept can be capitalised by marketers to play. Also the guilt of the kid spending in offer to arranging birthday parties and more time at the play area makes the other incentive linked progams. parent increase the bill size. Thus the advertising and marketing of fast food REFERENCES outlets can be kid oriented. All promo Mark D.Jekanowski, James K. Binkly activities should be designed to want the & James Eales., (2001) kid to stay for longer at the outlets which “Convenience , Accessibility in turn increases bill size. and the Demand for Fast food”, Journal of Agricultural and Though the parents are aware Resource Economics, 26(1): that the food at ChicKing is unhealthy 58-74 they are drawn to the outlet because of pester. They also tend to reward the kid Claire Lambert, Richard Mizerski., for doing well by promising visits to the (2012) “Kids, Toys and Fast outlet. However health conscious food: An unhealthy Mix”, parents tend to spend less. Marketers www.anzmac.org

827 Margaret-Anne Lawlor, Andrea Marketing Science Review, Prothero., (2010) “Pester Volume 8 power- A battle of wills between children and their parents”, Blattberg R & Neslin S.A.,(1990) J o u r n a l o f M a r k e t i n g “Sales Promotion, Concepts, Management Volume 27, issue Methods & Strategies”, 5-6., (2011) Prentice-Hall

Fischer, Paul M, Schwartz, Meyer P, Silk A.J., (2009) “What is Marketing”, Richards, John W. Jr, Goldstein Harvard Business School & Adan O., (1991) “ Brand logo Publishing recognition by children aged 3 to 6 years: Mickey Mouse and Lambert C. & Mizerski R., (2011) old Joe the Camel” , Journal of “Kids, Toys and Fastfood: An t h e A m e r i c a n M e d i c a l Unhealthy Mix”, Australian & Association., (1991, Dec 11) New Zealand Marketing Academy conference Swati Soni & Makarand Upadhaya., (2007) “Pester Power Effect of Horgan Sheena., (2005) “Kids are Advertising”, International Stakeholders in Business”, Marketing Conference on www.kidsinc.co.uk Marketing & Society IIMK Seth G, Rao G, Radhakrishnan J, Kaur Pavleen & Raghbir Singh.,(2006) Vijayan R.S, Musale R.B, Nath “Children in Family Purchase S.,(2008) “Pester Power: Is a Decision Making in India and Buyers Decision Persuaded?” the West”, Academy of IDEA Research Paper

828 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 829-839

STUDY ON CONSUMER SATISFACTION TOWARDS BRANDED CONSUMER NON DURABLES A study with reference to rural consumers in Kerala

Hari Sundar.G.Ram1, Bibin Markose2

Abstract

Considering the changing rural consuming system the rural consumers are becoming more concerned about the branded items not only in the case of consumer durables but on non durables also. Hence the study is undertaken with the objective of analyzing the consumer satisfaction towards the non-durables The study was confined to three districts of Kerala representing north, south and central zones covering a sample of 300 rural consumers and analyzed with the help of indices. The study highlights the fact that distribution net work of the producers are seemed to be effective, it is seen that for 'availability' factor consumers recorded highest level of satisfaction for all selected products. It is also noted that for price the level of satisfaction is the lowest, which implies that if the products are offered into low price, there is a scope for expanding market share of the products.

Keywords: Rural consumer, Non-durables, Consumer satisfaction, Reference group

1. INTRODUCTION behaviour of rural consumers. The It is well established that consumers sophistications in approach to the rural in rural areas are different from consumers in markets are clearly a necessity and starts urban areas. The rural market itself is with recognition of the non-existence of the diverse with vastly different behaviour average rural consumers. across different geographical locations or across buyer groups. Their purchases reflect 2. PURPOSE OF RESEARCH their level of income, preferences towards The behaviour of consumers differs different cultural and social practices, and from product to product. The decision their standard of living. The place of making process; based on the nature of the purchase of a product and product usage products vary from complex decision vary according to consumers, products and making process to habitual buying situations and add to the complexity in the

Associate Professor, Dept of Management Studies, Sree Narayana Gurukulam College of Engineering, Kolenchery, Kerala, Assistant Professor, Dept of Management Studies, Sree Narayana Gurukulam College of Engineering, Kolenchery, Kerala, [email protected]

829 behaviour. Usually complex and extensive Trivandrum District, Mattathur Panchayat decision making involved in purchasing, of Thrissur District and Pulpally Panchayath high value, long durable products whereas of Wayanad District. routine and habitual decision making involved in low value, essential and daily From each of the above Panchayath used products like non durables or three wards were selected randomly and 100 consumables. However due to the changes consumers were selected from the selected in the rural market scenario and the efforts of wards using random sampling. Thus a total the marketers to convert low involvement of 300 household consumers constituted the products to higher involvement products by sample of the study. A structured schedule increased product features, arrival of large was used to conduct the survey during the number of brands with differential prices period 2011-12 discounts incentives offers etc. rural consumers are more conscious towards 4.1Statistical Tools used for the study product choice and go for branded items For analysing the satisfaction out of even for consumer nondurables. Thus, even the selected products by the respondents, for consumer non-durables consumers' satisfaction indices were calculated involvement become very high. This calls andkruskal value test was used for testing for need for understanding the rural the significance of the result. : consumers satisfaction level with respect to branded consumer non durables . 4.1.1 Kruskal Wallis test The Kruskal Wallis one way 3. OBJECTIVE: analysis of variance by ranks is an extremely To assess the level of satisfaction of useful test for deciding whether the rural consumer's towards branded non independent samples are from different durables populations. It will explain whether the differences among the samples signify 4. METHODOLOGY genuine population differences or whether The study was confined to three they represent merely random samples from districts of Kerala representing north, south the same population. and central zones. The districts selected were Thiruvanthapuram, Thrissur and The Kruskal Wallis test was applied here Wayanad. Through multi stage sampling by using the formula: procedure one panchayath from each district 12 k Rj2 and three wards of each panchayath were H  nj - 3 (N  1) N (N  1)  nj selected. Thus the present study was n  1 confined to Athiyannoor Panchayath of

830 Where, pickles) and edible oil (Coconut oil and Palm oil) were selected. K = number of samples

th nj = number of ? in j sample 5. ANALYSIS AND DISCUSSIONS N = ? nj, the number of cases in all samples combined 5.1 Users of Selected Consumer Non- Durables Rj= Sum of ranks in j th samples The survey of 300 consumersrevealed k that 77 per cent of the total respondents were  directs one to sum over the K samples. the users of rava and 83 percent of n  1 respondents were using wheat flour.the usage of toothpaste, bath soap and coconut oil were used by almost all selected 4.2 Product selection consumers. However jam is used by only 52 For the purpose of the study ten percent of the respondents and 73 percent of products two each from five categories of the respondents were using palm oil consumer non durables viz. food items

(rava, wheat flour) Toiletries (Bath soap and 5.2 Satisfaction towards Rava (ND1) toothpaste). Beverages (tea, coffee) Table 1- Satisfaction Index (Rava) processed fruits and vegetables (jam and

Total Kruskal Wall’s Test ND 1 N= 2 Score SI λ Assy.sy

Quality (V 1 ) 439 64 8.41 0.015

Price (V 2 ) 292 19 0.926 0.629

Availability (V 3 ) 583 85 51.42 0.000

Packing (V 4 ) 468 66 28.515 0.000

Taste (V5) 442 65 69.152 0.000

Total 2211 685

It is clear from the table1 that, the The Kruskal-Wall's Test in the satisfaction index lies in the most case of rava revealed that λ2 varies from favourable zone with respect to availability 8.412 to 69.152. The agreement among the of the product in the 3 zones and for other respondents with respect to level of variables satisfaction index fall under satisfaction was found to be significant for moderately satisfied zone. It can be further the characters like availability, packing and inferred from the table that for the variable taste. There was difference of opinion price the level of satisfaction is the lowest. regarding the trials like quality and price.

831 5.3. Satisfaction towards Wheat flour: Table 2 Satisfaction Index (wheatflour)

Total Kruskal Wall’s Test ND N= 2 Score Score SI λ2 Assy.sy

Quality (V 1 ) 181 247 66 12.693 0.602

Price (V 2) 99 131 35 10.114 0.006

Availability (V 3 ) 254 269 72 1.932 3.81

Packing (V 4 ) 172 248 66 12.569 0.002

Taste (V5) 263 239 64 5.242 0.73

Total - 1134 -

T able 2 revealed was very low in the While Kruskal Wall's test with respect to looking into the total consumers it is evident the above observations revealed that more that for 'price' the level of satisfaction is the association in the opinion of the respondents lowest and highest is recorded with respect can be noticed with respect to quality, price to availability. For other variables and packing. But for availability and taste the significance is only 38 per cent and 7 per consumers are moderately satisfied. cent probability level respectively.

5.4. Satisfaction towards Bath soap Table 3 Satisfaction Index (bath soap)

Total Kruskal Wall’s Test

ND N= 3 Score SI λ2 Assy.sy

Quality (V 1) 1055 72 12.549 0.002

Price (V 2) 764 52 6.130 0.047

Availability (V 3 ) 1445 14.798 0.001

Packing (V 4) 1211 17.881 0.000

Taste (V5) 1684 14.868 0.001

Total 5859

832 The analysis revealed that for all almost all values are found to be significant selected variables consumers were mostly and hence we may in few that the level of satisfied except in the case of price. From satisfaction among the respondents with the table , it is further noted that value,t λ2 respect to the variables are inter related and Value ranges from 6.130 to 17.881 from significant in the regions. variable one to five compared to table values

5.5. Satisfaction towards Toothpaste Tooth Paste Table 4 Satisfaction Index (tooth paste)

Total Kruskal Wall’s Test ND4 N= Score SI λ2 Assy.sy

Quality (V 1) 1023 70 3.183 2.04

Price (V 2) 282 53 3.525 0.172

Availability (V 3) 1383 94 1.287 0.525

Packing (V 4) 925 63 70.676 0.000

Taste (V 5) 1041 71 78.568 0.000

Total 5154 1031

An analysis of the consumers as a whole with respect to the level of satisfaction reveals that the variables like was also tested and Kruskal Wall's Test availability, taste and quality high level revealed that the λ2 value varies from of satisfaction can be noticed and for 1.287 to 78.568. With respect to packing other variables the level of satisfaction is and flavour the value found to be only average. significant and for other variable the agreement among the respondents is The association of respondents very poor.

833 5.6. Satisfaction towards Tea Table 5 Satisfaction Index (tea)

Total Kruskal Wall’s Test

ND5 N= Score SI λ2 Assy.sy

Quality (V 1) 726 61 10.064 0.007

Price (V 2 ) 589 49 10.837 0.004

Availability (V 3 ) 1068 89 53.203 0.00

Packing (V 4) 754 63 96.946 0.000

Taste (V5) 850 72 14.172 0.000

Total 3946 67

It was evident from the table that to tea proved significant for all …values of except in the case of availability all other the five variables. Thus our claim that variables fall under moderately favourable variables are important is reassured zone. The Kruskal Wall's Test with respect

5.7. Satisfaction towards Coffee: Table 6 Satisfaction Index (Variable wise) Total Kruskal Wall’s Test ND6 N= Score SI λ2 Assy.sy

Quality (V 1) 545 68 68.729 0.000

Price (V 2) 417 52 38.405 0.000

Availability (V 3) 737 92 62.326 0.000

Packing (V 4) 566 70 10.025 0.007

Taste (V5) 591 73 6.780 0.034

Total 2850 70

834 The result revealed that for respect to coffee proved significant for 'availability' the consumers was mostly all λ 2 values of the five variables. Thus satisfied and for all other variables, their our claim that variable are important is level of satisfaction was only moderate. . re-assured and there is agreement among the respondents regarding the level of The Kruskal Wall's Test with satisfaction.

5.8 Satisfaction towards Jam Table 7 Satisfaction Index (jam)

Total Kruskal Wall’s Test ND7 N= 2 Score SI λ Assy.sy

Quality (V 1) 554 71 30.347 0.000

Price (V 2) 532 68 135.568 0.000

Availability (V 3) 712 91 44.622 0.000

Packing (V 4) 553 70 10.311 0.006

Taste (V5) 648 81 25.819 0.000

Total 70 350

As revealed in table 7 the level of varies from 10.31 to 135.568 from variable satisfaction towards availability, taste and one to five. When compared to table values flavour fall under mostly favourable zone all are highly significant. Thus we can infer and other variables under moderately that there is agreement among the satisfied zone.The test of above respondents with respect to level of observations revealed that the λλ2 values satisfaction.

835 5.9. Satisfaction towards Pickle Table 8 Satisfaction Index (pickle)

Total Kruskal Wall’s Test ND8 N= Score SI λ2 Assy.sy

Quality (V 1) 222 63 9.584 0.008

Price (V 2) 185 53 39.731 0.000

Availability (V 3) 300 86 69.000 0.000

Packing (V 4) 225 64 18.687 0.000

Taste (V5) 225 64 30.326 0.00

Total

An overall analysis showed that except for are highly satisfied. The significance of the 'availability' factor for the rest of the above observation was tested and the result variables only fell under moderately revealed that λ2 value with this respect varies favourable zone and for 'availability', they from 9.584 to 69.000. 5.10. Satisfaction towards Coconut oil Table 9 Satisfaction Index (coconut oil)

Total Kruskal Wall’s Test ND9 N= Score SI λ2 Assy.sy

Quality (V 1) 420 69 13.941 0.001

Price (V 2) 249 40 23.476 0.000

Availability (V 3) 502 82 66.943 0.000

Packing (V 4) 406 66 9.036 0.011

Taste (V 5) 542 89 22.858 0.000

Total

836 It is evident from the table that for packing for all other four variables 'price' come under the least satisfied zone agreement among the respondents in the and for the rest of the variables high level opinion was found. There was poor satisfaction is recorded in all the three zones. agreement regarding packing and it was found significant at 11 per cent probability The Kruskal-Wall's Test with level. respect to above observation shows that but

5.11 Satisfaction towards Palm oil Table 11 Satisfaction Index (palm oil)

Total Kruskal Wall’s Test ND10 N= Score SI λ2 Assy.sy

Quality (V 1) 258 67 74.000 0.000

Price (V 2) 215 56 3.187 0.262

Availability (V 3) 342 89 2.840 0.242

Packing (V 4) 247 64 12.566 0.002

Taste (V5) 262 68 6.399 0.41

Total

The consumer index of palm oil respect to availability of the pr0oduct revealed that highest satisfaction index 89 and for other variables it come under was recorded for availability and lowest for moderately favourable zone . price. For the rest the satisfaction index was  Satisfaction Index for wheat flour on an average 75.The Kruskal Wall's Test revealed that satisfaction towards revealed that the values varies from 2.84 to availability was very high and it was 74.00 . High level of significance can be low for price noted with respect to the traits like quality,  The analysis with respect to bath soap packing and taste. For other characters like revealed that consumers were highly price, availability. The significance was satisfied except in the case of price. only at 20.2 and 24.2 per cent respectively.  For tooth paste the level of satisfaction with respect to availability was very 6. FINDINGS OF THE STUDY high and very low with respect to price  In the case of Rava, satisfaction Index irrespective of regions. lies in most favourable zone with  Satisfaction Index of tea shows that but

837 for availability all other variables fall to identify the taste difference among the under moderately satisfied zone and consumers of different regions by the high level of satisfaction can be noticed marketers of the product. As a whole it can for availability factor. be inferred that the marketing strategies  In the case of High level of satisfaction adopted by the manufacturers/producers was recorded for availability factor and should suit to the different regions of Kerala for all other traits the satisfaction was especially with respect to taste and price of only moderate. the product. Adoption of the same kind of  In the case of Jam g the consumers as a marketing strategies should not be enough whole moderate level of satisfaction for penetrating the rural market. Suitable can be noticed except in the case of modification should be adopted considering price. the socio-economic conditions of rural  Satisfaction index of pickle showed consumers that, satisfaction towards price is very low . REFERENCES Gaur, S.S and Vaheed,K.A. 2002. Study of  The analysis with respect to the buying behaviour for branded fine satisfaction towards coconut oil rice.Indian J. market. Vol.32(7): revealed that price come under the least p.33-36 satisfied zone and for other variables, high level of satisfaction was recorded Holbrook, Morris, B. and Eliza beth, C., irrespective of regions. Hirshman, 1982. The experimental  The level of satisfaction towards palm a s p e c t s o f c o n s u m p t i o n - oil showed that highest satisfaction was consumers fantasies and fun journal recorded in the case of availability of consumer research p 62-64 Kaul, factor . T.L., Grewal, S.S. and Rangi, P.S. 1977. An economic analysis of 7. CONCLUSIONS AND nutritiion problem in India. Indian SUGGESTIONS Journal of Agriculture Economics, The variable-wise level of Vol. 25 (4), Oct-Dec.p.68-73. Philip satisfaction Index as explained above kotler and Harry Armstrong (1995) highlights the fact that distribution net work Principles of Marketing, Prentice of the producers are seemed to be effective, hall Inc. p. 142. it is seen that for 'availability' factor consumers recorded highest level of Philip kotler and Harry Armstrong (1995). satisfaction for all selected products. It is Prinicples of Marketing, Prentice also noted that for price the level of Hall inc. p. 142. satisfaction is the lowest, which implies that if the products are offered into low price, Consumer jagdish. T., Tilak, B and Vinay, G. there is a scope for expanding market share (1991). Customer.s satisfaction on of the products. A further study was required

838 44. Allwyn trendy watches. indian Marketing, Vol. 13:2-3, Nov. 11, J.Market. Vol. 21 : p.17-28 p12-14 VikasSaraf, 2003. Branding: Hub of the corporate wheel. Indian Journal of Verma, D.P.S. and Israney, H. (2000). Marketing, Consumer attitude towards a d v e r t i s e m e n t m e s s a g e s vol. 13:2-3, Nov. 11/ p12-14 Vikas Saraf, deliberation. India.J.Market. Vol. 2003. Branding: Hub of the 30: p.2-6. corporate wheel. Indian Journal of

839 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 840-856

PESTER POWER AS A STRATEGIC TOOL FOR ADVERTISERS A STUDY WITH REFERENCE TO THIRUVANANTHAPURAM, KERALA

Hari Sundar.G.Ram1 and D. Sudha Rani Ravindran2

Abstract

This research paper in albeit provides an empirical study on the various drivers of pester Power and tries to identity the most influential source creating pester power. The study also attempts to study the impact of pester power on final Purchase derision. The key literature on pester power is reviewed. Primary data was collected from a sample of 84 children aged 3-7 and 8-12 using questionnaire survey. Various statistical methods such as Pearson correlation, Linear Regression and Chi tests were employed using SPSS version 16.0 to analyze the data. Children regard TV commercials as an important information source for new product. However, they also place greater level of trust in interpersonal information sources, especially in their parents who are perceived as the most credible information source with respect to their learning about new food products. Also it has been verified that the extent to which no of children is directly effecting the degree to which children are able to influence their parent's decision. The study has made a contribution to the extant literature on children as consumer. The findings would be valuable in assisting companies, especially those in the food and FMCG industry, to have a better understanding of children's buying behavior.

Keywords: Pester power, Consumer, Attitude, Advertisement, Behaviour

1. INTRODUCTION creating pester power, because advertisers If advertisement to consider the know what a powerful force it can be. most influential, evergreen fashionable tool of promotion, than using children in Marketing guys are obsessed with advertisement is the most popular trend. feat tiring children in advertisements and Marketing guys are obsessed with featuring catering to (heir 'needs'. From "My Daddy children in advertisement sand catering to strongest" to "Mummy ka magic chalega their 'needs'. "Pester power" refers to kya", to "Daagachcheu hai" they are all over children's ability to nag their parents into flooded with exposing children be it cough purchasing items they may not otherwise drops or pain killers, vacuum cleaners or buy. Marketing to children is all about water purifiers, tooth pastes or floor

Associate Professor, Sree Narayana Gurukulam College of Engg, Kolenchery, Kerala Professor, PSG Institute of Management, Coimbatore, [email protected] 840 cleansers, automotives or even home Greater Exposure to Kids -There is appliances. They are no longer being treated an ever-increasing exposure to kids both in as passive viewers, but are targeted as terms of technology and mass media. 'influencers' in household buying. And it is not just because this burgeoning brood is The pang and guilt of not being able demanding more clothes, more shoes, more to spend much quality lime with children is toys and more games. Rather, these kids, compensated by smothering them with who could be three-year-old tykes, arc huge material goods. influencers in their parents' big-ticket purchases - from luxury cars to laptops. Hurried Child Syndrome and Hyper Experts peg the market for products and parenting-Parents today overscheduled their services in which kids play the role of an children's' life with a heavy dose of influence at an astounding $100 billion (Rs academics and extracurricular activities, 450,000 crore). forcing the little adults to excel both at school and extra academics. 1.1 Drivers of Pester Power: The Major Factors Responsible for Pester The 'Askable Parent-The great Power authoritarian divide between parents and Indian society has undergone a children is inexistent. 'Parenting' is out and sweeping change in terms of the structure being pals/friends to the children is the in and environment of its vital institution-Tile thing. Communication between parents and Family. children has opened up considerably and the stereotypical roles have become rarer. This More working women and endearment encouraged the wanton kids to consequently more dual income families. ask for material pleasures which t hey know would never be denied by their parent turned Grand parents' increasing role in pal. bringing up children because of working mothers. Grand parents' are the fastest Growth of Retail Sector There growing income sources for the children. appears to be a high positive correlation between the growl h of the retail sector and Rise in the number of single parent the development of the kids market. There households- Research supports that children a r e o p p o r t u n i t i e s g a l o r e . E v e r y in single parent households make their first departmental has a space assigned purchases almost a year earlier than their exclusively for kids merchandise ranging two-parent household counterparts. from Kriish apparels to Power Ranger bikes. A perfect example is the growth of indoor Delayed Parenthood-This results in amusement centres in malls targeted to parents with more disposable incomes at the children. lime their children are born.

841 Kids Channels-The dedicated 2002, their spending exceeded $40 billion. channels to kids programming target kids in Kids direct buying power is expected to two ways-'eye-balls' on channels that is, exceed IS 1.8 billion by 2006 (Laws, 2003). viewing and brand promotions. Cartoon No matter how you look at it, advertisers Network and Disney lead the pack. choose children because they are the most easily influenced and will spend their money The paper touches upon this if they find something interesting. sensitive issue and tries to identify the most influential drivers of Pester Power. The A growing awareness was secondary issues which were highlighted developed during the 1990s that children through the research papers were identifying had enormous market potential, not as one the conditions/ factors in which a marketers market but as three a current market are best able to create Pester Power through spending their own money in order 1o advertisement. The study also attempts to satisfy their own needs and wants, an identify condition for parents response influential market attracting a substantial towards child tantrums. This includes amount of parental expenditure, and a future factors like Watching hours; Age Group and market that eventually will constitute all the number of children in a family etc. customers for a firm's services (McNeal and Yeh, 1997). 2. REVIEW OF LITERATURE Today's children are unique in many Compared to children with siblings, ways from previous generations, but the only child generation tends to present perlrdps the most influencing on our young certain characters in that they appear to be children today is Television advertisements, less cooperative with their classmates, less "In 1997, the nation's estimated 34 million task-oriented, and possess fewer leadership children age 12 and under will have spent or qualities (Hall, 1987). influenced spending of a record $500 billion" (Horovitz 1997).There is obviously John (1999) proposes a model of a great deal of interest in ibis subject, many consumer socialisation in which children books have been written, and many studies learning to be consumers are theorized to and reports done on the effects of TV undergo a developmental process in three advertising on children. stages: from the perceptual stage through to the analytical stage, followed by the Children don't just have their reflective stage as they mature into adult parents buy t heir toys, but they make consumers. purchases of their own. Children's spending has roughly doubled every ten years for the Ward et al. (1977) utilised the past three decades, and has tripled in the learning theory to explain consumer 1990's. Kids ages 4 to 12 spent S2.2 billion socialisation and postulated "a basic in 1968 and $4.2 billion in 1984. By 1994, component of children's learning about the the figure climbed to $17.1 billion and by marketplace is knowledge of sources of

842 information about products." Socialisation 2.2 Mass Media as Socialisation Agent agents are the influential sources that convey While parents are considered the norms, attitudes, motivations, and primary socialisation agents of children, "no behaviours to the learner (Mcl.eod and other agent of consumer socialisation has O'Keefe, 1972). Much evidence shows that received more attention (in the literature) parents, peers, mass media, stores, schools, than the mass media" (Moschis, 1987, brands, and products themselves and their p.121); Nowadays children are in the packages arc all sources of information, environment of the omnipresence of television in which programmes and namely socialisation agents (Ward, 1974; commercials are used with persuasive Moschis and Churchill, 1978; Moschis and intentions. Considerable evidence has Moore, 1979; Moschis, 1987; Dotson and shown that the more children interact with Hyall, 2005). Mascarenhasand Higby the mass media, the more consumer (199.3) classified sources of influence upon behaviour learned by children and the more teen's shopping into person and situation consumer socialisation occurs (Moschis and factors, such as opinions and attitudes Churchill, 1978; Moschis and Moore, 1982; towards product, brand and store, market O'Guinn and Shrum,1997). advice and purchase values and norms available from parents, peers and the media. 2.3 Retailer as Socialisation Agent Retailers can be logically expected 2.1 Parents as the Primary Socialisation to be significant consumer socialisation Agent agents, also, because of the regular and The influence of family on frequent store visits by children and the consumer socialisation appears to produce interactions between the two parties effects more through the subtle social (McNeal and Ji, 1999, p.347). Research interactions between parents and their shows that the average ten-year-old child children than purposive education effects goes shopping 250 times per year, or carried out by parents (Ward, 1974). During approximately five times per week (Dotson the processes of direct communication and Hyatt, 1994). The more often parents between parents and children, parents take their children shopping, the more conscious the children become of the influence their children's interactions with information about products such as price and other consumer influence sources, and play brands (Shim et at., 1995). Shopping was a role to modify the effects of other listed by children as their second favourite socialisation agents upon their children, alter-school activity after watching T V such as mass media and peers groups (Schnlman and Clancy, 1992). (Moschis, 1985,1987). In terms of the relative importance of different information 3 RESEARCH METHODOLOGY sources, television, parents, store visits and 3.1 Objective of the Study: friends were ranked as the most important The major objectives of the study sources of information by Chinese children are to ascertain the prime reason that creates (McNeal and Ji, 1999). pester power. 843 1. To identify the most influential tool A list containing eight items was creating Pester Power. presented 4 from the eatable category and 2. To identify which part of commercial other four were grocery items and the is most retained by the kids most. children were asked to report what was most 3. To identify how parents respond to likely source for them to learn about a new their child tantrums. type of each. The list was compiled after a 4. To identify whether child respond two-week observation on which products differently for different category of were most frequently advertised. In the first product. part, children's media exposure and 5. To identify whether degree of pester shopping habits were examined, questions power is different for different age related to the impact of socialisation agents group kids. such as peers, attributes of products, and brands and children's information sources of 3.2 Research Design new products were investigated. The total of Research design is descriptive in 100 questionnaire were distributed and 84 nature. Based on the objective of the were returned back giving a return rate research the study was carried out involving ol'84%. both primary and secondary data. The primary data was collected through Data Analysis and Interpretation TV questionnaire for the survey from Viewing Watching Hours Thiruvananthapuram district, the capital of Refer-Table I, 38 percent of the Kerala as this is the district which has a children were heavy viewers (more t ban 3 cosmopolitan population owing to the hours per day in weekdays), 30 percent were number of various Government and Central moderate viewers (less than 3 hours per day Government offices which has people from in weekdays), and 32 percent light viewers across the country working.The children of (Less than one hours). 3 primary schools were asked to take the questionnaire home for completion and Demand from the Parents return it to their teachers within three days, Figure I summarizes the children the questionnaire was divided into two part: demand patterns towards the two categories Part A to be filled by the kids and Part B by of products. Pester Power seems to be more the parents. Empirical data were collected for eatable product category as compared to from the children of two age group viz: 3-7 FMCG products. Surprisingly the pattern of and 8-12. Children of these ages were kids' remembering the commercial are expected to be mature enough and have been almost the same as that of demand pattern. found in previous studies to be: On asking the question that which part of the Active, independent shoppers (McNeal, commercial they remember the most the 1992); Highly cognitive of their following result was obtained Table II. The consumption choices (Belkelal.,1982);and above figure shows that brand celebrity and Knowledgeable about products and brands slogan are the parts of commercial which are (Ward et al, 1977). best retained by the kids.

844 The research also tries to identify the most corresponding to the coefficient of number informative/influential source creating of children is 2.554 and is significant which Pester Power. It can be concluded through shows that the correlation is positive , the research that children finds television as moderate and significant. the most informative source followed by the friends/peers pressure. Table III The above two results indicated that children's attitude towards products Inferential Analysis advertised on TV may not be significantly The role of TV and the child related to the number of hours that they watching behavior on children response watched TV and the degree of attention that Hal: No. of watching hour effect the children they paid to advertising has a strong impact response to product they saw on TV. on the degree of pester power shown by the children. Table. V Pearson Correlation (r) was conducted to test if there were relationships Age Group as an Important Factor between hours that children spent watching Influencing Child Behavior TV and the attitudes toward products Ha3: Child behavior differs age wise advertised on TV. Surprisingly no significant relationship were found between A strong positive correlation the hours children spent watching TV and between age group and degree of pester the desire to buy the products advertised on power created is identified. Since p value is TV (r = 0.079,p=0.475). Table IV .029, which is less than the sig level (.05 ) the null hypothesis is rejected stating that the Attention Behaviour towards TV age group of kids definitely pose an impact Commercial Ha2: children attitude towards on the parents reaction towards child TV commercial effect their degree of pester tantrums. The coefficient of correlation is power. .239.The value of t-statics corresponding to the coefficient of number of children is - With regard to the degree of 2.225 and is significant which shows that the attention paid to TV commercials, the result correlation is negative , moderate and suggested that the degree of pester power significant. The value otr2 is .057 and F towards product was significantly correlated value is 4.950 which is significant as to the attention paid to TV commercials. A indicated by p value(.029). Table VI linear regression was undertaken. The Ha4: Kids response towards a product they criterion variable included the items for kids saw on television differs Gender Wise response towards the product, while the independent variables consisted the degree No significant differences were of attention paid to TV commercials found between genders: girls were equally respectively. The regression provided a likely to state their demand as indicated by statistically significant r2 of 0.074 (F= 6.S25; the chi square value (3.747 with p=.290). P=0.012), further the value of t-statics Table VII

845 Age Group and number of Children Parents who cannot deal with the in the family as factors influencing parents rising demands or temper tantrums only tend response towards their kids Pester Power to give in to the demands of their children. Ha3: no of children in a family influence the Children then get used to a certain kind of parents response to the child tantrums lifestyle, which is shown on the television or through various media. This only creates a The research also focus on very wrong impression on their young minds identifying a relationship between number making them lose the ability to live a life of children in a family and the parents without relying on materialistic joys. In reaction towards the child tantrums Since p short this study illustrates the integration of value is .0000 which is less than the sig level three levels of influence on Pester Power (.05 )the null hypothesis is rejected stating behaviour: Interpersonal, Environmental, that the number of kids definitely pose an and the products. The interpersonal impact on the parents reaction towards child influences considered are those from parents tantrums. The coefficient of correlation is and peers. The environmental influences .510. the value of t-statics corresponding to refer to the exposure to television and the coefficient: of number of children is - shopping visits. The attributes of products 5.370and is significant which shows that the include brand name, taste, price and correlation is negative , moderate and package. The study has produced the significant. The value of r2 is .260 and F following major findings: value is 28,837 which is significant as indicated by p value(.000). Table VIII Advertisement, especially TV commercials, plays an increasingly Ha5: age of children affect the parent's important role in children's learning about response towards the child's tantrums new products and exerts growing influence on their preferences for certain items. The The research also tries to identify power of advertising thus, cannot be weather the age group of children has an ignored. impact on the Parents response. A negative, moderate and significant correlation is No. of watching hour do not effects the identified The value of r2 is .120 and F value children response to product they saw on is 11.178 which is significant as indicated by T.V. p value. (001). Table IX Children attitude towards TV, commercial effect their degree of pester 4. FINDINGS power. Advertising influences the minds of Children's altitude towards the children, which creates a need to own that television commercials also differs age particular product being advertised. Glossy wise. images on the magazines or billboards or Gender differences have no effect upon flashy advertisements on television only children's consumer socialization. create the urge for impulsive buying.

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848 children: 1995- 2002", Journal of it socialization perspective", Journal Consumer Marketing, 20 (6), pp. 542 o f C o n s u m e r R e s e a r c h , 6 554. (September), pp. 101-112. McNeal, J.U. and Yeh, C.I I. (1997), Paiget, J. (1970), "The Science of Education "Development of consumer behavior and the Psychology of the Child". patterns among Chinese children". NY: Grossman. Journal of Consumer Marketing, 14 Schulman, Y. and Clancy, K. (1992), "Adults (1), pp. 45-57. and children, a real gap", Adweek, Moore, R.L. and Moschis, G.P. (1981), "The 33 (February), pp. 48. effects of family communications and Selman, R.L. (1980) "The Growth Inter- mass media use. on adolescent personal Understanding". New York consumer learning', Journal of Academic Press. Communication, 31 (Fall), pp. 42-51. Shim, S., Snyder, L. and Gehrt, K.C. (1995), Moschis, G. (1987), "Consumer "Parents' perception regarding Socialization: A Life Style children's use of clothing evaluative Perspective". Lexington, MA: criteria: an exploratory study from Lexington Book. the consumer socialization process Moschis, G.P. (1985), "The role of family perspective , in Kardes, F. R. and communication in consumer Sujan, M., ed. Advances in Consumer socialization of children and Research, 22, pp.628-632. adolescents', Journal of Marketing Ward, S. (1974), "Consumer socialization", Research, 11(4), pp. 898-913. Jour na] of Consumer Research, 1 Moschis, G.P. and Churchill, G.A. (1978), (September), pp. 1-14. "Consumer socialization: a Ward, S. and Wackmau, D.B. (1973), theoretical and empirical analysis", "Effects of television advertising on Journal of Marketing Research, 15 c o n s u m e r s o c i a l i z a t i o n . (November), pp. 599-609. Cambridge", MA: Marketing Moschis, G.P. and Moore, R.L. (1982), "A Science Institute. longitudinal study of television Ward, S., Wackman, D.B. and Wartella, E. advertising effects journal of (1977), "How Children Learn To Consumer Research, 9 (December), Buy: The Development of Consumer pp. 279-287. Information Processing Skills". Moschis, G.P. and Moore, R.I,. (1979), London: SAGE Publications Ltd, "Decision making among the young: Beverly Hills.

849 Table 1 : Respondent Profile % Male 56 Female 28 Age group distribution of the children 3-7 54 8-12 30 No. of Children in a Family 1 28 2 29 3 19 4 7

Table 2 : Result of Commercial part they Remember

Table 3 : Research that Children find television as the most informative source

850 Table 4 : Effect of Number of watching of commercial on Children's Response to Product seen on TV.

Model Summary

a. Predictors : (Constant), Hours Anova (b)

a. Predictors : (Constant), Hours b. Dependent Variable: What_you_do for product Coefficients (a)

a. Dependent Variable: What_you_do for product

851 Table 5 : Children's attitude towards TV Commercial & its effect on the degree of pester power

Test of Between-Subjects Effects

Model Summary

a. Predictors : (Constant), Response

Anova (b)

a. Predictors : (Constant), Response b. Dependent Variable: What_you_do for product

852 Coefficients (a)

a. Dependent Variable: What_you_do for product

Table 6 : Child Behavior Differs age wise

a Predictors : (Constant), age_group

Anova (b)

a Predictors : (Constant), age_group b Dependent Variable: response

853 a Dependent Variable: response

Table 7: Kids response towards a product they saw on television differs Gender Wise

Chi-Square Tests

a 4 cells (50.0%) have expected count less than 5. The minimum expected count is 1.33.

854 Table 8 : No. of Children in a Family influence the Parents response to the Child Tantrums

Symmetric Measures Correlations Model Summary

a Predictors : (Constant), no#of_child Anova (b)

a Predictors : (Constant), no#of_child b Dependent Variable : for_parents

855 Coefficients (a)

a Dependent Variable : for_parents 67 Table IX : Age of Children Affect the Parent's Response Towards the Child's Tantrums

Model Summary

a Predictors : (Constant), age_group

Anova (b)

a Predictors : (Constant), age_group b Dependent Variable : for_parents

Coefficients (a)

856 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 857-866

CONSUMERS' PERCEIVED SECURITY RISKS IN ONLINE SHOPPING: A SURVEY STUDY IN SRI LANKA

A.Ilmudeen

Abstract

Consumers' perceived security risks in online shopping is an important aspects which influence consumer's buying behavior in online. This paper focuses ten dimensions of consumer perceived risk such as performance risk, physical risk, financial risk, sauce risk, security risk, delivery risk, time risk, social risk, psychological risk and privacy risk in Sri Lankan context. Research question and hypotheses were determined after the wide spectrum of literature review. Structured questionnaire method used to collect the data and there were 128 respondent participated in this research study. The results also proved that privacy and security concerns are the main barriers to shopping on the Internet. The analysis include descriptive analysis, the Pearson correlation analysis and t-test. From this research study it can be concluded that, the column " importance" the hypotheses such as financial risk, delivery risk, time risk, social risk, psychological risk and privacy risk has negative effect on attitudes towards online shopping. On the other hand the column "the chance the risk occur" the hypotheses such as performance risk, physical risk, financial risk, sauce risk, security risk, delivery risk, time risk, social risk, psychological risk and psychological risk has negative effective on attitudes towards online shopping.

Keywords: Security, Risk, Online shopping, Risk dimension

1. INTRODUCTION distant and impersonal nature of the market E-commerce is defined a subset of stores, the insecurity of using open network ebusiness in purchasing, selling, and infrastructures for transactions, involvement exchanging of goods and services over of third parties in the transaction process, computer networks through which online payment system, and hacker's transactions or terms of sale are performed threaten for the buyers privacy and monetary electronically. Basically on-line shopping information. In general the temporal has certain characteristics than traditional separation between consumers and shopping such as the massive use of marketers increases fears of web retailer technology to complete the transaction, the which creates identity uncertainty, and there

Lecturer (Prob.) Management & Information Technology , MIS Unit, Department of Accountancy & Finance Faculty of Management and Commerce, South Eastern University of Sri Lanka, Oluvil [email protected]. 857 is a concern about the third parties or hackers H i g h l y p r o t e c t e d t e c h n o l o g i c a l involvement that may threaten consumer's infrastructure is a necessary base and by privacy and monetary information. itself not sufficient for creating the level of Consumers in online may fear providing trust needed for natural electronic credit card details to any commercial Web transactions over the Internet. provider thus consumers simply do not trust most Web providers enough to engage in Perceived Risk exchange relationships connecting money. In a typical purchasing situation, a In each day millions of consumers surf buyer perceives a certain level of risk which thousands of e-commerce sites with the influences the choice of a particular brand purpose of buying products and services. and how to purchase this particular product. With the immense rate of technological Perceived risk is a key concept in consumer advancement and globalization, internet behavior that involves consumers utilization to obtain instant information has experience pre-purchase insecurity as to the increased tremendously around the world. type and degree of expected loss resulting (N. U. De Silva and R. Syed). Previous from the purchase and use of a product. researchers identified various factors which Kaplan L B et al (1974) categorized the pressure the buyer's online decision making. perceived risk into six category such as Such research confirmed that “Customer performance risk - refers the chance that a Trust” plays a key role towards buyer's product bought results in failure to function decision making process. Web shopping as it expected, Social risk - the chance that involves a number of concerns of a product bought not satisfied/ disapproval consumers, including trade fraud, product by the family members or friends, quality, monetary losses, privacy, Psychological risk the chance that a product information quality and so on (YE Naiyi results in contradiction with self-image, (2004). Srinivasan (2004) mentioned that Physical risk refers to the chance that a acquiring customer trust depends on many product purchased results in personal hurt, things such as appeal of the Web site, Time risk refers the chance that a purchase product or service offerings, branding, results in loss of time to buy the product and quality of service and trusted seals. A recent Overall perceived risk - refers an aggregated research finding declared that “Any impact of these various factors. From the purchase decision is at the conjunction of extensive literature survey the following three factors the value or need for the dimension of consumer perceived risks were product or service, the quality of the user identified and with their meaning. By experience, and the potential purchaser's focusing each risk dimension the trust” (Winch & Joyce, 2006). In this survey questionnaire developed to gather online study ten perceived risk dimensions which buyers opinion about the importance of each have important impact on consumer online risk and the chance that risk will occur. shopping were verified and proposed.

858 Table 1 : Consumer Perceived Risk Dimension

Perceived risk dimension Definition

Performance risk The product doesn't perform as expected (e.g. quality, size, or defects).

Physical risk The products have a negative effect on the body (quality, material).

Financial risk Potential loss of the current cost as well as additional charges in future (e.g. possibility product may need to be repaired, be changed, or

difficulty to get money back).

Sauce risk False or fake online information causes that the product purchased online doesn’t meet the expectations.

Security risk Loss of money if the credit card information is hacked.

Delivery risk Not receiving the product on time, long delivery time, or product being damaged during the delivery.

Time risk Waste time researching information and purchasing when finally making

a bad purchasing decision.

Social risk The resistant/pressure from the friends or the family

Psychological risk Loss of self -esteem, or disappoint ment from the frustration of not achieving a buying goal.

Privacy risk Personal information will be collected without user's cons ent when giving one’s credit card number online or use of cookies and web bugs.

Conceptual Model security risk, delivery risk, time risk, social The below conceptual model was risk, psychological risk and privacy risk in used in this research to examine the effect of the perceived risks in online shopping in Sri the risk dimensions such as performance Lankan context. risk, physical risk, financial risk, sauce risk,

859 Performance risk

Physical risk H1

H2 Financial risk H3

Sauce risk H4

Security risk H5 Perceived Risks In

H6 Online Shopping Delivery risk

H7 Time risk H8

Social risk H9

Psychological risk H10

Privacy risk

Figure 1: Conceptual Model

H1: The perceived performance risk has a H6: The perceived delivery risk has a negative influence on consumers' negative influence on consumers' perceived risks in online shopping. perceived risks in online shopping. H2: The perceived physical risk has a H7: The perceived time risk has a negative negative influence on consumers' influence on consumers' perceived perceived risks in online shopping. risks in online shopping. H3: The perceived financial risk has a H8: The perceived social risk has a negative negative influence on consumers' influence on consumers' perceived perceived risks in online shopping. risks in online shopping. H4: The perceived sauce risk has a negative H9: The perceived psychological risk has a influence on consumers' perceived negative influence on consumers' risks in online shopping. perceived risks in online shopping. H5: The perceived security risk has a H10: The perceived privacy risk has a negative influence on consumers' negative influence on consumers' perceived risks in online shopping. perceived risks in online shopping.

860 2. OBJECTIVE OF THE RESEARCH consumers' lack of acceptance in electronic This research has the following commerce adoption today is not merely due objectives such as identify which perceived to the concern on security and privacy of risk dimension influences the online buyers their personal data, but also lack of trust and purchasing decision and identify how the reliability of Web vendors. Ramin Azadavar online buyers perceive the risk in terms of its et al (2011) mentioned that, e-commerce and importance and the chance that risk occur. online shopping will rely on buyers' how people interact with computers. Suresh and 3. LITERATURE REVIEW Shashikala (2011) mentioned that, Internet Electronic commerce is defined as being relatively new channel of purchase, “any form of business transaction in which consumers perceives risk and electronic the parties interact electronically rather than commerce is perceived to be more risky than by physical exchanges or direct physical traditional commerce. Yi Yi Thaw et al contact" Euro Info Correspondence Centre (2009) indicated that although e-commerce (2002). Keen et al (2000) stated that a is spreading worldwide, customers are still working definition of “trust” as when a reluctant to deal with it because of the customer purchases a product or service security and privacy issues. Further Suresh from a particular “merchant”, the client has and Shashikala (2011) mentioned that the a “confidence”, the seller will supply goods major concerns of online shopping are with adequate quality and fitness for 'security of online payments' and 'privacy of purpose. Basically in online shopping personal information'. activities, risk and security have forever been an area of concern among online 4. RESEARCH DESIGN & METHOD - consumers. The extensive literature review OLOGY shows that factors which influence Methodology consumers' buying decisions can be Structured questionnaire was used classified in to several aspects such as the to collect the data. The questionnaire was individual level, personality attributes often developed in a electronic format and usual play an important role in the process of printed format. The questionnaire's same purchase decision making. content included in both electronic format and printed format questionnaire. The Srinivasan (2004) declared that electronic format of the questionnaire “Two factors which significantly contribute included check boxes to be checked by the to the success of e-business thus the trust respondents by consider their answering people place in the online businesses and easiness and user friendliness. The how secure they feel in transacting business questionnaire was developed by the on the Internet”. Godwin J. Udo (2001) researcher and its content were checked by a mentioned that privacy and security senior academic. Questionnaire included concerns are the number one reason Web many questions in the aspect of consumer users are not purchasing over the Web. Yi Yi perceived risk in various dimensions. The Thaw et al (2009) mentioned that questionnaire includes two sections to

861 gather the details from the respondents such 5. RESULTS AND DISCUSSION OF as the respondent's demographic profile FINDINGS age, gender, and education background, The below table shows the demographic experience of online shopping. The second profile of the respondents with their section gather the details of the different frequency and the percentage. perceived risk dimensions in terms of their importance and the risk occurrence. These Table 2 : Demographic statistics of the dimensions were measured under two respondents columns such as "importance of the risk" and Gender 89 "chance that the risk occur" Questionnaire Male 39 69.5% Female 30.5% included 6 point likert scale. The column " Age Category importance of the risk" measured from 1- not 15-17 1 .8% 18-20 11 8.6% important at all and 6 - very important. The 21 - 23 26 20.3% column "chance that the risk occur" 24-26 25 19.5% 27 - 29 20 15.6% measured from 1 - completely impossible 30-32 8 6.2% 33-35 13 10.2% and 6 - very possible. This research includes 36-38 9 7.0% analyses such as descriptive analysis, 39-41 6 4.7% >42 9 7.0% correlation analysis and t-test. Education A/L 30 23.4% Technical College 2 1.6% Data Collection High School Diploma 17 13.3% The electronic and usual printed Under-graduate 31 24.2% Post graduate degree 42 32.8% format of the questionnaire issued to Doctoral Degree 6 4.7% How frequently purchase online professionals, MBA students, academics more frequently 14 10.9% and friends who purchase in online. From once a month more than once a month 16 12.5% the issued questionnaire, 95 printed format at least once in 6 month questionnaires and 33 electronic format at least once a year 17 13.3% questionnaires were received from the 18 14.1% respondents. 63 49.3%

Data Presentation and Analysis Correlation analysis for the risk The collected questionnaire were dimensions entered into the SPSS 16.0 version for the The below table shows the data analysis. Tabular format of results were developed research hypotheses and the generated to show the results. Descriptive relationship between their perceived risk statistics, correlation analysis, t-test, dimensions (independent variables) with the average score with standard deviation and its perceived risks in online shopping respective charts were generated to present (dependent variable). The perceived risk the findings. dimension's two aspects correlation were

862 measured such as the perceived risk privacy risk has negative effect on attitudes dimensions importance and the perceived towards online shopping. risk dimensions of chance the risk occur separately calculated. The hypotheses and Table 4 : One-Sample Test the results are as follows.

Table 3 : Pearson Correlation for the Perceived Dimension

Perceived risk Pearson Pearson dimension Correlation Correlation for for chance importance of the risk the risk occur H1- Performance risk 0.126 -0.025

H2 - Physical risk 0.062 -0.006

H3 - Fin ancial risk -0.079 -0.105 One sample t-test was conduct to know H4 - Sauce risk 0.081 -0.120 the significance of these factors and results H5 - Security risk 0.149 -0.042 are show as above. From this research study

H6 - D e livery risk -0.096 -0.089 it can be concluded that, p value (0.000) is less than the significant level of 0.001 for all H7 - Time risk -0.075 -0.017 the risk dimension factors. Therefore it can H8 - Social risk -0.067 0.002 be concluded that all the factors significantly

H9 - P sy chological risk -0.006 -0.003 affect consumer's perceived risks towards online shopping at 99.99% confident level. H10 - P rivacy risk -0.040 -0.188 Risk Dimensions Mean Score and

The hypotheses were tested with at Standard Deviations 0.05 significant level. The results shows that the column, "importance" the hypotheses such as H3, H6, H7, H8, H9 and H10 are significantly supported; thus financial risk, delivery risk, time risk, social risk, psychological risk and privacy risk has negative effect on attitudes towards online shopping. On the other hand the column "the chance the risk occur" the hypotheses from H1 - H10 are significantly supported; thus performance risk, physical risk, financial Figure 1: Perceived Risk Dimensions risk, sauce risk, security risk, delivery risk, Importance time risk, social risk, psychological risk and The above chart shows the average

863 score for all perceived risk dimensions for ranked to "a little possible". The standard the column "importance" from the deviation for this dimensions score lies respondent answer. Mean scores for all between 0.824 -1.276. Therefore it can be dimension lies between 4.11 - 5.51. Among concluded that, the perceived risk the above 10 risk dimension except 3 risk dimensions column "chance that risk will dimension (such as scores 4.51, 4.11 and occur" were in a kind of possible status 4.82) all other dimension reached score 5. In among respondent. Further the standard the questionnaire 5 ranked to "important" deviation's most of the values nearing to and 4 ranked to "a little important". The score 1 standard deviation and since these standard deviation for this dimensions score values are closer to 1, data were somewhat lies between 0.774 -1.293. Therefore it can away to their mean score. be concluded that, the column "importance" majority of the perceived risk dimensions 6 . L I M I TAT I O N S & F U T U R E were in a kind of "important" status among RESEARCH AVENUES respondents. Further the standard This research just addresses about deviation's most of the values nearing to the perceived risk in online shopping using score 1 standard deviation and since these the risk dimension. Other than this perceived values are 1 and closer to 1, data were risk dimension other aspect of purchasing somewhat away to their mean score. can be considered to determine the consumer's security risk in online shopping. The selected respondents (sample size) only 128 by using convenient sampling method. Therefore a self-selection bias might have influences the findings of this research and it may also limit the generalizability of the findings. There are more rooms to improve the generalizability of the research findings since it covered small limited sample size. This research study did not cover factors Figure 2 : Perceived Risk Dimensions of like, cultural biases, social, income and Chance the Risk Occur buying behaviour with the formed research hypotheses. The above chart shows the average score for all perceived risk dimensions for 7. CONCLUSIONS the column "chance the risk occur" from the The rapid development of IT and the respondent answer . Mean scores for all extensive accessibility of the Internet have dimension lies between 4.3 - 5.02. Among facilitated for the popularity of online the above 10 risk dimension except 1 risk shopping. Understanding people's dimension (score 4.3) all other dimension perceptions of attitudes towards online risks are nearing to reach score 5. In the is vital for ecommerce. This research is questionnaire 5 ranked to "possible" and 4 focusing consumer perceived security risk in

864 online shopping over the Internet specifically targeting on the perceived risk Ellen Garbarinoa, Michal Strahilevitzb, " dimensions. In general a consumer Gender differences in the perceived perceives a certain degree of risk in terms of risk of buying online and the effects brand of a particular product when buying o f r e c e i v i n g a s i t e online. From this research study it can be recommendation", Journal of concluded that, the column " importance" Business Research 57 (2004) 768 the hypotheses such as financial risk, 775 delivery risk, time risk, social risk, psychological risk and privacy risk has negative effect on attitudes towards online Godwin J. Udo (2001)" Privacy and security shopping. On the other hand the column concerns as major barriers for e- "the chance the risk occur" the hypotheses commerce: a survey study" such as performance risk, physical risk, Information Management & financial risk, sauce risk, security risk, Computer Security 9/4 [2001] 165 - delivery risk, time risk, social risk, 174 psychological risk and psychological risk Lingying Zhang, Wojie Tan, Yingcong Xu has negative effective on attitudes towards and Genlue Tan " Dimensions of online shopping. Consumers' Perceived Risk and Their Influences on Online REFERENCES Consumers' Purchasing Behavior", A. F. Salam, H. R. Rao, and C. C. Pegels CISME Vol. 2 Iss. 7 2012 PP. 2011- (2003) "Consumer-Perceived Risk 2012 World Academic Publishing in E-Commerce Transactions", Kaplan L B, Jacoby J, Szybillo G (1974). COMMUNICATIONS OF THE "Components of perceived risk in ACM December 2003/Vol. 46, No. product purchase: a cross- 12ve validation". Journal of Applied Amy Dusto, Associate Editor (February 5, Psychology, , 59(3): 287-291 2013)" Global e-commerce tops $1 Marzieh Zendehdel1, Laily Hj Paim " trillion in 2012"[Online]. Available Perceived risk of security and a t : privacy in online shopping: A study http://www.internetretailer.com/20 of Malaysia context", Life Science 13/02/05/global-e-commerce-tops- Journal 2012;9(4) 1-trillion-2012 Nena Lim, "C onsumers' perceived risk: Emad Y. Masoud, " The Effect of Perceived sources versus consequences", Risk on Online Shopping in Electronic Commerce Research and Jordan", European Journal of Applications 2 (2003) 216228 Business and Management ISSN 2222-1905 (Paper) ISSN 2222- N. U. De Silva and R. Syed, E COMMERCE 2839 (Online) Vol.5, No.6, 2013 TRUST, AN EMPIRICAL STUDY

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866 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 867-881

IMPACT OF CELEBRITY ENDORSEMENT : A STUDY ON CONSUMER GOODS SALE

R.Ramachandran

Abstract

In the present era, selling is a complicated task due to stiff competition and many alternative products. Products have become more consumers oriented. Consumers have become more sophisticated. For instance, they posses the best product at a fair price. The products are a better quality than the substitute produce for sale. But Sales aren't automatic. The prior idea of the production is for the sales. How will the buyers get the product, when they have not heard of our products? Therefore, people must have knowledge of the existence of the product and its availability. This is possible only through a good propaganda. It arises a need for proper flow of information along with products from producer to consumer. It can be done through the activity of promotion. Promotion is the process of Marketing Communication aimed to inform, persuade and influence people. It become very essential, rather a duty, of the manufacturers to make the consumers know from where, how, when and at what price the product would be available. More and more promotional activities are required to induce the consumers to purchase more and more products and thus demand for the product is created. The basic purpose of promotion is to let potential customers to know about the product through various forms, roles, models, persons. Thus, the research paper throws light up on current trends in celebrity endorsement and its impact through various models have considered. For the purpose 100 samples on simple random techniques in Tiruchirappalli (Trichy) town and through application of Chi-square test and other methods, it is found that it has major impact in promotion process.

Keywords: Celebrity, Endorsement, Consumer Goods, Advertisement, Product, Marketing.

1. INTRODUCTION development of printing has greatly boosted Advertising has the prominent place the ideas of advertising through newspapers, among the techniques of mass education and magazines, and hand-books. In earlier persuasion on the public. It is not a modern periods, it was used only in a limited manner. origin. It has been used from immemorial But now-a-days it has been greatly utilized. period. In earlier period, Advertisement was displayed in the form of sign boards, writing The nineteenth century gave rise to on historical buildings or inscriptions on the specific industry of advertising. With the stones, stone-pillars, stone walls etc., The passage of time and the untiring efforts of the

Ph.D. Assistant Professor in Commerce, DDE, Annamalai University, Annamalai Nagar 608 002, Tamilnadu, India. [email protected]

867 people involved, advertising became an to the most recent Sensational association of autonomous field. There is much more Hrithik Roshan with Sony Ericssion”, coming in this field in the present century celebrities have done wonders for brand with the advent of internet and globalization. recall. Consumers worldwide are going for online advertising and gradually it may supersede Research conducted by Katherine TV and Cinema. It has been found to be an Eckel, Professor of Economics at U.S excellent method of being linked with Virginia tech, has revealed that celebrities whatever information is needed. Most of the are 'Higher Status Agents' can get people to advertisement has won laurels on account of make a better choice but can't influence the fantastic celebrity usage that do impact 'people to make a foolish choice'. In India upon the audience in the most positive way. today, the use of celebrity advertising for There is a purpose behind why celebrities companies has become a trend and a are taken in advertisement. A celebrity can perceived winning formula of corporate be any person from Films, Modeling, Sports, image building and product marketing. This and Politics etc. that tend to catch the phenomenon is reflected in the recent attention of the public just by being in the market research finding that 8 out of 10 TV advertisement. Actually, there is a Commercials scoring the highest recall were psychological element acting here in which those with celebrity appearances. the audience is influenced to purchase the product advertised. In India today, the use of A familiar face tends itself to a celebrity advertising for companies has higher degree of recall of an advertisement. become a trend and a perceived winning Most of us always remember Nakshtra formula of Corporate image-building and advertising only due to the sensuous Product cum services marketing. Aishwarya Rai. In fact, a piece of research states that the target audience with age group Turn the brands into celebrities of 15-30 gets influenced first by Cricketers, Associating a brand with a top- then Bollywood Stars and only then by notch celebrity can do more than perk up Music, Festivals and Food. Through brand recall. It can create linkages with the endorsement, celebrities have an immense Star's appeal, thereby adding refreshing and potential to earn fame and fortune within a new dimensions to the brand image. quick span of time. We love everything Celebrities have proved to be the ideal way about celebrities-their fame, their fortune, to ensure brand prominence. Synergizing their looks, their achievements, their personality with product and message can Charisma, their larges than Life presence, create an instant breakthrough. Result? and everything…. Endorsements bring 'Brand buzz'. Celebrity endorsement is a enhanced recognition to a Star, and may serious business, and if used effectively even prolong the life cycle of a Star in his/her could have a lasting impression on the brand, maturity phase (like Big B with his Kaun its activities and its image. Right from Benega Cororepati) After all, Choice of “Kapil Dev's “ Palmolive Ka Jawaab Nahin” celebrity is a good indicator of who's in who's not.

868 Recent Trends and Selection the relationship between the brief, the brand There are 3cs that enjoy mass and the celebrity is established, the adulation in this country Cricket, Cinema association is accomplished. and Curry. Advertiser and Marketers feel, only Actors and Cricketers can deliver It is also important for one to be Return on Investment, Considering the mass completely clear about why a brand should popularity that they all enjoy. Cricketers are use a celebrity. Is it to boost sales or to boost marketed very well. They are groomed to be image? Or is it just to keep the brand alive? If brands themselves. It is assumed that they the objective is increase of sales the celebrity lead glamorous lifestyles. There is a three- should be used for short-term promotion and stage process of meaning transfer which brand activities. (A Classic example is the involves the formation of the celebrity Rani Mukheijee Compaign for Bata which is image, transfer of meaning from celebrity to believed to have helped boost sales for the brand and finally from brand to consumer . ladies footwear brand, Sundro p, by a That is what leads to effective celebrity whopping 500%). In the event of an image- advertising. The Selection of a celebrity for a building exercise, the celebrity can be used brand is done primarily on the basis of a for a longer period of time, So that the brand marketing brier prepared either by the can derive the benefit of the celebrity's corporate or the Advertising Agency. Once image on its own.

TOP CELEBRITY ENDORSERS Sl.No. The Big Endorsers The Brands 1. Sachin Tendulkar Pepsi, Adidas, TVs, Airtel, Boost, Britannia, MRF, ESPN.

2. Shah Rukh Khan Pepsi, Santro, Videocon, LML, Airtel, Sun Feast, Compaq, Pulsepolio. 3. Amitabh Bachchen Cadbury’s, Hajmola, Dabur, Parks, Nerolac, Emami, Reid & Taylor, Pepsi, Rin Advanced, Nowratna Oil, Pulse Polio, PETA. 4. Aishwarya Rai Nakshatra (DTc), Coke, L’oreal, Lux, Eye Donation, Longines Watches.

5. Preity Zinta Frito Lays, Maggi, TVS PEP, Cadbury’s Perk, Head & Shoulders, Godrej. 6. Aamir Khan Titan, Coke, Toyota Innova 7. Sourav Ganguly Tata Indicom, Emami-Sona Changi Chywanprash, Hero Honda, Britannia, LG, Pogo Chips.

8. Virendra Sehwag Coke, Boost, Mayur Suitings, Dabur, Team Samsung, Band-Aid, Britannia Adidas. 9. Rahul Dravid Samsung, Hutch, Castrol, Pepsi, Britannia, Reebok, Bank of Baroda, Max New York Life, Anchor, Kissan, Tuberculosis Association of India.

10. Sania Mirza Tata Tea, Hindustan Petroleum, Santro Getz, Malabar Gold, Lotlo Sport Italia, Sach (NGO), Tata Indicom. Source: Primary data.

869

Related Review of Previous Studies revealed that majority of the respondents Relevant reviews are collected to watched television programmes frequently. observe the research gap and it is identified Many of the viewers were of the opinion that as that the present study concentrates on television was an appropriate medium of impact, advertisement role and its advertising the products. Some respondents differences. They are, William L. James, and opined that television was not an appropriate Arthur J. Kover (2002) conducted a study on media for family planning devices and “observations: Do overall attitude towards sanitary items, because it caused advertising affect involvement with specific embarrassment while they watch television advertisement”. The study aimed to measure programmes with family members. Majority the overall attitude towards advertising and of television viewers were interested in to examine to which of those attitudes affect commercial advertisements. Television t h e i n v o l v e m e n t w i t h s p e c i f i c advertisement in the form of film was most advertisement. The respondents were popular among viewers. Viewers gave three supplied with 15 print advertisements. major reasons for monotony, while viewing Among those advertisements 3 were test television advertisements: (a) Large number advertisements and 12 were non-test of advertisements being shown (b) repetitive advertisements. The study employed the advertisements and (c) exaggerated claims Bauer and Greyser attitude scale. The made in the advertisements. Adequate statistical analysis towards program information about the products was not interruptions were more involved in included in all television advertisements. advertisements. Further the study found that Respondents were after induced to purchase those with more negative attitude towards the products advertised on the television. advertising were more involved in the Viewers were satisfied with the products advertising than those with more involved in purchased by them on the basis of television the advertising than those with more positive advertisements. But the study also reported attitude. It was also found that people who that some of the viewers had mentioned that believed that advertising was a good way to they were misled by television advertise- learn about products are more involved in ments. When they made complaints to the advertisements than people who were more manufacturers, fifty percentages of the negative towards advertising. consumers' grievances were redressed.

Verma D.P.S. and Senhkalra (2004) Ida E. Berger, and Andrew A. conducted a study on television advertising Withell (2005) conducted a study on the and viewers attitudes. The study attempted effect of advertising on attitude, to assess the reactions of television viewers accessibility, attitude confidence and regarding the commercial advertisements attitude behavior relationship. They shown in various television programmes. examined the possibility that advertising The respondents were 32 males and 33 repetition affects the strength of memory, females. The statistical analysis of the data information processing and whether such an

870 effect can influence the strength of the In the opinion of Bhatt and Jaiswala attitude behaviour relationship. The author (2006) “An effective advertisement is the worked on the following three hypotheses. one that leaves a long-lasting impression on a. In a single advertising exposure the consumer's mind and motivates him to condition, strength of memory would purchase the product”. Meryl Paula Gardner be lower than the direct experience (2007) is of the opinion that when a product condition and the repeated exposure attribute (like utility, durability, and condition. p a c k a g i n g ) i s p r o m i n e n t i n a n b. The information processing in the advertisement, it is more likely to be recalled single exposure condition will be lower by individuals and that attribute is more than direct experience and repeated likely to affect the attitude of the individuals. exposure condition. c. Attitudes formed on the basis of direct Youjaeyi (2010) attempted to study experiences would be more predicative the effects of print advertisements, which of subsequent behaviour than attitudes contained ambiguous information about the on a single advertising exposure. product. The study originated from the hypothesis that an advertisement, which T h e a u t h o r s e l e c t e d t h e contains specific product attributes can have advertisements of granola bar, a white either a positive or negative effect on the chocolate bar, a wafer bar, a toffee bar and a evaluation of the advertised brand, by mint product. All the products are of same altering the way ambiguous information of structure. The following four conditions the product in an advertisement is were employed in the study (a) direct interpreted. Two experiments were experience condition (b) single advertising conducted in the study by using print exposure condition (c) three exposure condition and (d) four exposure condition. advertisement for a new personal computer. The sample for the first experiment From the analysis the data stated consisted of 40 students and for the second that there was no significant difference in the experiment were 120 students. The test memory strength of the single advertising advertisement contained a headline in the exposure condition, and in the direct bold face and three paragraphs of messages experience condition. The attitudes based on emphasizing the features of computers. The the direct experiences were held with more subjects were supplied with three booklets. confidence than those based on the single In the first booklet the subjects were asked to exposure advertisement. It was also found provide the general background that it was possible to increase the information. The second booklet contained information processing though repeated the test advertisements and in the third advertising exposure. The correlations booklet the subjects were asked to generate provided a strong base for third hypothesis the salient attribute of a personal computer that repeated exposure to advertisements that would come to mind. The result of the increased attitude behaviour consistency. study found that evaluations of the target

871 brand were affected by the advertisements Scope of the Study context priming different product attributes. This research is aimed to know “The impact of Celebrity Advertisement” Objectives of the Study particularly in consumer goods at Trichy 1. To analyze the impact of Celebrity town. The information provided by this Endorsement Advertisement towards research can be used as vital sources for consumer goods at Tiruchirappalli further area of choose of celebrity and type (Trichy) town. of advertisement. There have been many 2. To determine, what the viewers feel numbers of studies to evaluate the about the advertisement and which effectiveness of the advertisement. But this channel have they seen. study would facilitate in understanding the 3. To bring out the differences of celebrity consumer attitudes towards the celebrity a d v e r t i s e m e n t w i t h O r d i n a r y advertisement and their choice of celebrities advertisement. and channel which has more viewer ship. 4. To evaluate whether the dislike of the This study also offers an extended scope to celebrity results in dislike of the know whether the celebrities take part of product. right decision while the consumers purchase the product. To know the opinion about the Hypothesis of the Study celebrity advertisement vs. ordinary  There is an association between type of advertisement this helps to the marketers to advertisement and respondent opinion. use of celebrity endorsers in their product.  There is an association between prefer to watch celebrity advertisement and Methodology of Research Study age. A good research work requires a clean scientific methodology became only  Age and induced to buy the product by through the application of correct c e l e b r i t y a d v e r t i s e m e n t a n d methodology in selection of sampling independent. techniques, appropriate tools of data  Occupation and induced to buy the collection a well-defined conclusion can be product by celebrity advertisement are drawn on the phenomenon under independent. consideration. Descriptive and analytical  Income and induced to buy the product research design has been used for the study, by celebrity advertisement are which is concerned with describing the independent. characteristics and process of what has  Marital status and induced to buy the happened (or) it describes the state of affairs product by celebrity advertisement are as it exist at present. The objective of a independent. descriptive study is to learn the who, what, where and how of a topic. The total data  Respondent differ in their opinion required for this study has been studies regarding notice of celebrity under two categories. The sequence of advertisement and induced to buy the questions was decided and it was arranged in product. a logical order. The rough questionnaire was

872 prepared and thereafter-necessary various journals, magazines, and internet. alterations were made to revise it to check its The internet, which is the richest source of reliability. After the revision, the final draft information, has also contributed largely to of the question was made for the purpose of the secondary data collected. field survey. Research Instrument For this study simple random The questionnaire was found to be method is used. It is chosen primarily on the the most suitable type of research instrument basis of the convenience to the investigator. to consider of a set of questions presented to The probability of the investigator's coming respondent for their answers. A Sequential across of local people of respective areas is procedure was followed in designing the much more then persons from Trichy town. questionnaire, which would serve the A Sample of 100 was taken for the study in purpose of the study. The content of the Trichy town. After finishing the research individual questions were prepared based on design, the survey has been taken in the the objectives. The type of question included targeted areas. For this study, the area of were, yes or no patterns, multiple choice, survey was Trichy Town. The respondents Ranking, Rating Scales etc., in order to were met in Colleges, Offices and measure the suitability and accuracy of the Residential Areas of Mainguard gate, Andal survey. Street, Anna Statute, Palakkarai, Woraiyur and Thillainagar from December 16th to 28th, Limitations of the Study 2013. 1. Survey is conducted only in Trichy town and projecting the result of the study to (a) Primary data other areas may not give significant This is the data collected from the results. respondents those who are in Trichy town, 2. Due to time constraints, the sample size through the questionnaire feedback and is limited to 100 only. interview with the respondents. 3. The usual hindrance in collection of data like non-response, errors and (b) Secondary data inconsistent response are being faced. The information relation to general details required has been gathered from

Results and Managerial Measures Table 1 Average opinion of Consumers regarding the ranking of various channels Channels Points Rank Sun 6.24 1st Vijay 6.17 2nd Jaya 4.13 3rd Raj 3.76 4th DD 2.51 5th Local Channel 3.14 6th Others 2.11 7th Source: Computed from the Primary data.

873 The application of Weighted Mean for The Vijay TV is rated second, the Jaya each channel has helped to come to a TV is Third, Raj and Local Channel rated conclusion of the average opinion of Fourth & Fifth, DD is ranked Sixth, Next Consumers regarding the ranking of comes the Other Channels given the rank various channels. Sun TV is being Seventh. ranked as First among all the Channels. Table 2 Weighted Mean for each various factors influence regarding celebrities

Various Factors Points Rank Appearance of the celebrity 3.92 1st Occupation 3.74 2nd Status 3.65 3rd Life Style 3.42 4th Achievements 3.30 5th Source: Computed from the Primary data.

The application of Weighted Mean for each appearance of the celebrity; the occupation various factors influence regarding got second place and status ranked third by celebrities has helped to come to a respondent; life style got fault place and Conclusion of the first rank goes to achievements ranked fifth. Table 3 Attitude towards celebrity advertisement

Rating Points Strongly Agree 2 Agree 1 Neutral 0 Disagree -1 Strongly Disagree -2

Source: Computed from the Primary data. Preference to Watch Celebrity Advertisement R ating 2 1 0 -1 -2 Frequ ency 23 57 12 6 2

= (2*23) + (1*57) + (0*12) + (-1*6) + (-2*2)/100 Weighted Average = 0.93

874 Like the Product which is Celebrity Endorsed

Rating 2 1 0 -1 -2 Frequency 15 51 23 9 02

= (2*15) + (1*51) + (0*23) + (-1*9) + (-2*2)/100 Weighted Average = 0.688

Celebrity Highlights Positive aspects of the Product

Rating 2 1 0 -1 -2 Frequency 26 37 20 13 04

= (2*26) + (1*37) + (0*20) + (-1*13) + (-2*07)/100 Weighted Average = 0.68

Recommend the Endorsed brand to others

R ating 2 1 0 -1 -2 Frequ ency 25 43 23 04 05

= (2*25) + (1*43) + (0*23) + (-1*04) + (-2*05)/100 Weighted Average = 0.65

Dislike of Celebrity leads to dislike of the Product

Ratin g 2 1 0 -1 -2 Frequency 15 22 25 17 21

= (2*15) + (1*22) + (0*25) + (-1*17) + (-2*21)/100 Weighted Average = -0.07

Sl.No. Attitude Weighted Average Rank 1. Preference to Watch Celebrity Advertisement 0.93 1 2. Like the Product which is Celebrity Endorsed 0.68 2 3. Celebrity highlights Positive aspects of the Product 0.68 2 4. Recommend the Endorsed brand to Others 0.65 4 5. Dislike of Celebrity leads to Dislike of Product -0.07 5

Source: Computed from the Primary data

875 It can be observed from the above and they are highlights the positive aspects that, the respondent rank the statement “ of the product. The third place goes to the P r e f e r e n c e t o Wa t c h C e l e b r i t y statement of 'Recommend the endorsed Advertisement “ in the I Place; Second brand to others'. The place of fifth says Place, shared by two statement of celebrity dislike of celebrity leads to Dislike of endorsed products one liked by customer product.

Table 4 Chi-square test for “Type of advertisement” and “Respondent opinion”

Ordinary Advertisement Celebrity Advertisement Sl.No. Opinion Yes No Yes No 1. Higher Coverage 50 03 47 - 2. Attention 25 10 62 03 3. Remembra nce 30 05 62 03 4. Induce to Buy 35 08 51 06 5. Help to Repurchase 45 02 46 07

Source: Computed from the Primary data. Degrees of Calculated Chi-square Valu e Level of significance freedom(df) 3 2.45 12 0.01

Ho: There is no significant difference calculated chi-square value (32.45), which is between type of advertisement and significant at 0.01 and the table value of x2 respondent opinion. (0.01) & (12df) is 26.217. So it is concluded Ha: There is a significant difference that the calculated value of x2>the table

between type of advertisement and value, and H0 is rejected. Therefore there is respondent opinion. significant difference between type of advertisement and respondent opinion. The result showed that the Table 5 Chi-square test for “Prefer to watch celebrity” advertisement and “Age”

Strongly Strongly Age Agree Never Disagree Total Agre e Disagree Belo w 20 8 9 10 3 0 30

20 – 30 Years 6 30 1 3 0 40 30 – 40 Ye ars 5 6 1 0 0 12 40 – 50 Ye ars 4 7 0 0 2 13 Abov e 50 0 5 0 0 0 5 Total 23 57 12 6 2 100 Source: Computed from the Primary data. 876 Degrees of Calculated Chi-square Valu e Level of significance freedom(df) 45 .27 16 0.01

H0: There is no association between calculated chi-square value (45.27), which is p r e f e r t o w a t c h c e l e b r i t y significant at 0.01 and the table value of x2 advertisement and age group. (0.01) and (12 df) is 37.566. So it is Ha: There is association between prefer concluded that the calculated values of x2>

to watch celebrity advertisement the table value, and H0 is rejected. Therefore and age group there is significant difference between prefer to watch celebrity advertisement and age The result showed that the group.

Table 6 Chi-square test for “Age” and “Celebrity advertisement”

Celebrity advertisement induced to buy A ge Total Yes No Below 20 20 10 30 20– 30 35 5 40 30- 40 8 4 12 40-50 5 8 13

Above 50 3 2 5

Source: Computed from the Primary data. Degrees of freedom Calculated Chi-square Valu e Level of significance (df) 12.65 4 0.01

2 H0: Age and celebrity Advertisement significant at 0.01 and the table value of x induced to buy are independent (0.01) and (4 df). So it is concluded that the Ha: Age and celebrity Advertisement calculated values of x2> the table value, and

induced to buy are dependent H0 is rejected. Therefore there is significant difference between celebrity advertisement The result reveals that the calculated induced to buy and age group. chi-square value (12.65), which is

877 Table 7 Chi-square test for “Occupation” and “Celebrity advertisement” Celebrity advertisement induced to buy Sl.No Ag e Total Yes No 1 Go vt. Employe e 25 11 36 2 Self Employe e 18 6 24 3 Professiona l 10 10 20 4 Othe rs 15 5 20 Source: Computed from the Primary data.

Degrees of freedom Calculated Chi-square Valu e Level of significance (df) 4 .003 3 NS

2 H0: Occupational level and celebrity significant and the table value of x (>0.01) Advertisement induced to buy are and (3 df). So it is concluded that the independent calculated values of x2< the table value, and

Ha: Occupational level and celebrity H0 is accepted. Therefore, there is no Advertisement induced to buy are significant difference between celebrity dependent advertisement induced to buy and The result reveals that the calculated occupation group. chi-square value (4.003), which is not

Table 8 Chi-square test for “Income” and “Celebrity advertisement”

Celebrity advertisement induced to buy Sl.No Income Total Yes No 1 Up to Rs.5000 30 4 34 2 Rs.5000-Rs.10,000 42 4 46 3 Rs.10,001 – Rs.15,000 11 1 12 4 Rs.15,001-20,000 4 2 6 5 Above Rs.20,000 2 NIL 2

Source: Computed from the Primary data.

Degrees of freedom Calculated Chi-square Valu e Level of significance (df) 3.661 4 NS

878 H0: Income level and celebrity chi-square value (3.661), which is not Advertisement induced to buy are significant and the table value of x2 (>0.01) independent and (4 df). So it is concluded that the Ha: Income level and celebrity calculated values of x2< the table value, and

Advertisement induced to buy are H0 is accepted. Hence, there is no significant dependent difference between celebrity advertisement induced to buy and income group. The result reveals that the calculated

Table 9 Chi-square test for “Marital status” and “Induced to buy”

Induced to buy Sl.No Marital status Total Yes No 1 Married 50 10 60 2 Unmarried 35 5 40 Source: Computed from the Primary data.

Calculated Chi-square Degrees of freedom (df) Level of significance Valu e 0.0 33 1 NS

H0: Marital status and induced to buy chi-square value (0.033), which is not through celebrity advertisement are significant and the table value of x2 (>0.01) independent and (1 df). So it is concluded that the Ha: Marital status and induced to buy calculated values of x2< the table value, and

celebrity Advertisement are H0 is accepted. It is inferred that no dependent significant difference between celebrity advertisements induced to buy and marital The result reveals that the calculated status. Table 10 Chi-square test to “Notice of celebrity advertisement”

Induced to buy Sl.No Celebrity advertisement Yes No 1 Noticed 60 4 2 Not Noticed 16 20

Source: Computed from the Primary data.

879 Calculated Chi-square Degrees of freedom (df) Level of significance V alue 3 0.71 1 0.01

H0: There is no significant association companies to make it in clear form so between induced to buy and notice of that it reaches all. celebrity advertisement 3. “Appearance” of the celebrity attracts more among the other features of the The result reveals that the calculated celebrity. So it is better to use the chi-square value (30.71), which is “People recognized personalities” in significant at 0.01 and the table value of x2 the advertisement helps to induce the (0.01) and (1 df). So it is concluded that the customers to buy the products. calculated values of x2> the table value, and 4. There is no doubt that the celebrity advertisement is much better than H0 is rejected. Thus, there is significant difference between induced to buy and ordinary advertisement and hence the notice of celebrity advertisement. manufactures should concentrate more on celebrity advertisement rather than Managerial Measures ordinary advertisement. From this research study, it is found 5. From the study, the dislike of celebrity that most of the respondents give positive is not leads to dislike of product. That is, opinion regarding celebrity advertisement. if they are not interested in celebrity endorser which is not affects the buying 1. Sun TV is a preferable channel to watch habits of the respondent. by the respondent so it is best to give 6. Advertising agencies should use advertisement particularly for creative theme which stimulate them to consumer goods and it has to regularize see the advertisement. And changing and streamline the celebrity process in them within the time span may help to mixture of scientific and traditional standstill the brand in the mind of the methodology so that it enriches the consumers. development and growth of objective. CONCLUSION 2. Advertisement is the best source to The prime focus of this study was to come to know about the product and investigate the study on impact of celebrity also found that the celebrities help to endorsement towards on consumer goods at intend them to buy the product. So the Trichy town. The study was conducted manufactures should concentrate among randomly selected 100 respondents. celebrity advertisement for their And to find out the effectiveness of the consumer goods which help them to celebrity advertisement with demographic sale their product successfully. factors in the various aspects were analyses. Certainly, it is necessary for the Certain conclusions were drawn from the

880 results of the findings. Further areas have Meryl Paula Gardner, “Advertising Effects been suggested for future research in on Attributes Recalled and Criteria connection with this study. To test the Used for Brand Evaluations”. Journal of hypothesis certain statistical tools such as Consumer Research, Dec. 2007, Vol.10, Percentage analysis, weighted average, Chi- pp. 310-318. square test, were used. It is find out that celebrity has major significant role on Sharma and Singla, “Identifying Attributes consumer goods sale process. for Advertising Effectiveness”. Indian Journal of Marketing, Aug. 1986, REFERENCES Vol.16, pp. 17-21. Bhatt and Jaiswal. “A Study of Advertising Impact and Consumer Reaction”. Stanton, W.J. Fundamentals of Marketing Indian Journal of Marketing, Nov. (fourth edition) Tokyo: Verma D.P.S. 2006, Vol. 17, pp. 9-16. and Sneh Kalra, “Television Advertising and Viewers Attitudes”. David A. Aaker and Douglas M. Stayman. Indian Journal of Marketing. April “Measuring Audience Perceptions of 1982, Vol. 8, pp.3-7. Commercials and Relating them to Advertisement Impact.” Journal of Verma D.P.S. and Senhkalra, “The Effects of Advertising Research, Aug/Sept. 1990, Contextual Priming”. Journal of pp. 7-17. Consumer Research, Sept. 2004, Vol. 17, pp. 215-222. Ida E. Berger, and Andrew A. Withell. “The William L. James, and Arthur J. Kover. Effect of Advertising on Attitude “Observations: Do Overall Attitudes Accessibility, Attitude Confidence and To w a r d A d v e r t i s i n g A f f e c t the Attitude Behaviour Relationship”. I n v o l v e m e n t w i t h S p e c i f i c Journal of Consumer Research, Dec. A d v e r t i s e m e n t s ” . J o u r n a l o f 2005, Vol. 16, pp. 269-279. Advertising Research, Sept. /Oct. 2002, pp. 78-83. Juli, E. Edell, and Marian Chapman Burke, “ T h e P o w e r o f F e e l i n g i n Youjaeyi. “The Effectiveness of Chinese Understanding Advertising Effects.” Print Advertisements in North Journal of Consumer Research, Dec. America”. Journal of Advertising 1987, Vol.14, pp. 421-434. Research, Oct./Dec. 2010, pp. 25-34.

881 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 882-891 A STUDY ON FACTORS AFFECTING ON CONSUMERS' FAST FOODS BUYING BEHAVIOUR : REFERENCE TO PIZZA HUT IN THE ANURADAPURA CITY AREA, SRI LANKA

YMWGPK Udurawana

Abstract

This explorative study conducted to identify factors affecting on consumers fast foods buying behavior with special reference to Pizza Hut outlet in Anuradhapura city area. The study population represented by each and every customer located in Anuradhapura city area and representative sample was selected including school children to foreigners and entrepreneurs those who have consumed pizza. 114 members out of 120 responded to the researcher, where they ware contributed to examine nine variables was Location, Atmosphere, Sales Persons Behavior, Awareness, Price, Quality, Image, Promotion, Fast Service with demographic variables and the required data was collected through structured questionnaires. Data was analyzed through descriptive techniques where percentages, mean, standard deviation, t test and cross tabulation ware facilitated. At the end researcher identified that all factors ware significant towards consumer buying behavior but related to the selected region customers was not satisfactory awareness about various brands of pizza, culture of pizza; location was confused on parking and low freedom even with atmosphere. And they enjoyed their image though consuming pizza appreciating sales person behavior but pricing, nutrition and promotion ware somewhat deviated on consumer expectation related to the analysis. Finally researcher suggested to change location of pizza outlets and commented to increase awareness of consumers related pizza culture.

Keywords: Pizza Hut, Fast Foods, Consumer Behavior

1. INTRODUCTION man used to have his food lavishly and In the modern days, where the life is slowly, the present trend changed the habits at fast pace with the time very valuable to to foods, which are simple and easy to digest. every person, "Fast Foods" play an Hence, the existence of these foods fulfilled important role in everyone's day-to-day life. all the needs of modern human being. The very term 'Fast food' means simple, fast Preparing food with instant mixes has and convenient food, which is easy and fast become a way life and no doubt they are to prepare besides being hygienic, free from going to be an integral part of food habit in microbial contamination and also future. convenient to eat. Unlike olden days where

Department of Business Management, Faculty of Management Studies, Rajarata University of Sri Lanka, Mihintale

882 In relation to the Anuradhapura However the demand for fast foods district majority of food consumption is still is unpredictability fluctuating on some at home than outplace. Nevertheless, out-of- occasions where a few organizations acquire home food consumption is increasing due to their business objective while other several consideration such as increase in organizations are run away from business urbanization, breaking up of the traditional environment on poor performance. This joint family system, desire for quality, time dynamic nature implies to researchers to which translates into an increased need for find factors which are affecting on consumer convenience, increasing number of working buying behavior. women, changing lifestyles and increasing level of affluence in the middle income And when considering the literature group had brought about changes in food Nadia & Shohana (2011) (01) identified that habits. Many researchers relating to fast foods such as Wilcock, Pun, Khanona, &Aung, (2004, In relation to the Anuradhapura city 63), Yarrow, Remig, and Higgins (2009 have area, there are various fast food providing argued that food safety beliefs, attitudes, organizations among them Alankulama knowledge, and practices can be altered Family Supper, Chinthana Bakers, Chamee through educational intervention, Restaurants, Carlton Restaurants, Seedeevi McCarthy, Brennan, Kelly, Ritson, de Boer, Restaurants and Pizza Hut are the extremely & Thompson, (2007); Röhr, Lüddecke, famous to customers. And Pizza Hut was the Drusch, Müller, & Alvensleben, (2005) nearly located in Anuradhapura providing stated food safety knowledge of the fast foods on deferent experience than other customers, Mattsson and Helmersson foods providers. Therefore researcher is (2007) conducted study on attitudes towards considering to study of factors affecting to fast food restaurant of young, Kruger, fast foods buying behavior related to the Blanck and Gillespie (2008) stated the pizza hut in Anuradhapura city area. dietary practice and physical activity of adults who had desire to loss and maintain 2. STATEMENT OF THE PROBLEM weight, Olumakaiye M. Funke and O.A Related to the identification of Ajayi described youngsters' snaking research problem, researcher contributed practice, United Soybean board reported relevant literature on fast food and empirical (2008) health and nutrition issues of food. evidence in Anuradhapura Pizza outlet. In relation to the researcher experience with Though much more research fast food at Pizza's initiated period in emerged on fast foods none of publications, Anuradhapura, who was unable to reserve researchers have explored the overall even a table in Pizza Hut for his friends as the behavior of customers on fast food in place was overcrowded by customers even Anuradhapura city with special reference to week days. But today the place rarely Pizza Hut outlet. Therefore in this study, crowded by customers even weekends or researcher tend to explore consumer overall some holidays. behavior when they having fast food in Anuradhapura city.

883 3. OBJECTIVES OF THE STUDY moved for other places the findings may be The generic purpose of this study is changed than explored. to understand how consumers make their behaviors towards fast food products and to 6. LITERATURE REVIEW investigate what factors influence on their The term "pizza" first appeared "in a fast food buying decision. Latin text from the southern Italian town of Being facilitated to upon purpose researcher Gaeta in 997 AD, which claims that a tenant has contributed specific objectives as of certain property is to give the bishop of denoted bellow. Gaeta 'duodecimpizze' ['twelve pizzas'] • To study the extent of consumer every Christmas Day, and another twelve awareness towards Pizza' fast Food every Easter Sunday". (Martin Maiden Products, (2012) (02) • To identify the factors influencing on consumer buying behavior of Pizza fast But Pizza Hut was familiar to the Food Products in Anuradhapura area, world around 1958, where Frank and Dan Carney had an idea for a great local pizza 4. RESEARCH HYPOTHESIS restaurant in Wichita Kansas. The small 25 On the basis of the objectives and seat restaurant used to sell pizza where used after reviewing the extensive literature the building looked like a hut… so 'Pizza Hut' following research hypotheses were framed was born! (Usha v. 2007) (03) by researcher. H1: There is a high level of consumer Pizza Hut in Sri Lanka is one of the awareness about Pizza fast foods in first variety chain stores in the country. Anuradhapura area Currently Pizza hut offers an online ordering H2: Location, Atmosphere, Sales system which delivers to the following Persons Behavior, Awareness, Price, outlets: Colombo, Negombo, Kandy, Quality, Image, Promotion, and Fast Service Kiribathgoda, Kotahena, Colpetty, Union are significantly influenced on consumer Place, Rajagiriya, Havelock Rd., Malabe, fast foods buying behavior. Dehiwala, Nugegoda, Thalawathugoda, Moratuwa, Maharagama Wattala and 5. LIMITATION OF THE STUDY Anuradhapura. (http://en.wikipilipinas.org) (04) This study was based on primary data collected from sample consumers by Brown et al. (2000), (05) considered survey method facilitating Anuradhapura about consumer awareness with fast foods city area. Therefore the study area was too consumption, and young consumers have limited. As many of the consumers furnished considered about effective nutritional the required information from their memory education before being with food habits. and experience, the collected data would be And though they considered balanced subjected to recall bias. And not only that nutritionally foods many young consumers researcher particularly considered only may fuel the consumption of poorly pizza outlets than other places. If it was nutritionally balanced meals.

884 Binkley (2006), (06) the theoretical acceptance of returns, credit facility, door model is based on household production delivery and in sales promotional measures. theory. This theory names the household as . “both a consumer and producer of final Yarrow, Remig, and Higgins (2009) goods,” (Binkley). He formulates the (09) and other previous researchers have general model argued that food safety beliefs, attitudes, knowledge, and practices can be changed Yi=f(P, I, T, H, D), where Yi through educational intervention. They and measure is the household's food choice, P is other researchers have therefore attempted a set of relevant prices, I represents to determine how to segment consumers so household income, T involves measure of that effective communication can take place time cost, H measures nutrition concerns regarding these issues. and knowledge, and D represents demographic and other factors. Yee and Young (2001), (10) concluded that customer attention goes to According to the Aaker (2000), (07) aware about nutrition and used to identify brand awareness as a remarkably durable nutrition on labeling or packaging details. and sustainable asset to enhance consumer And food companies should be encouraged awareness related fast foods. It provided a to make small changes to the fat of food sense of familiarity a sense of presence or products on customer request. commitment and substance and it was very important to recall at the time of purchasing Nandagopal and Chinnaiyan (2003) process. Apart from the conventional mass (11) concluded that the level of awareness media, there were other effective means to among the rural consumers is satisfactory create awareness viz., event promotions, level and the major source of brand publicity, sampling and other attention- awareness was word of mouth followed by getting approaches. advertisements, family members, relatives and friends. Study of Sundar (1997) (08) revealed that, grocery department of Ramasamy et al. (2005) (12) Saravana Bava Cooperative Supermarket, discussed the buying behavior and it was Cuddalore was enjoying favorable images of vastly influenced by awareness and attitude consumers in the attributes, such as, equality towards the product where commercial of price, behaviour of sales persons, moving advertisements over television was said to space, location, correctness of weight, be the most important source of information, packaging of goods, number of sales persons followed by displays in retail outlets. and convenient shopping hours. At the same Consumers do build opinion about a brand time, the image is weak in the attributes, on the basis of which various product such as, quality of goods, availability of features play an important role in decision range of products, variety of goods, making process. Not only that he explored

885 that large number of respondents laid education and income. The brand image emphasis on quality and felt that price is an seemed to be more important than the origin important factor while the others attached of the product, since the consumers were importance to image of manufacturer. attracted by the brands.

Not only that even Usha V (2007) 7. METHODOLOGY has mentioned several reasons for popularity According to the objectives of of Instant Food Products related to India research it is embraced the characteristics of where, Emergence of Industrial society, explorative research. And In this study Reduced domestic servants, Womenfolk researcher expected to quantify the taking to job, Emergence of nuclear preferences for fast foods products on families, Prices of raw materials, New demographic, situational, lifestyle, and products, Drudgery of work, Convenience, cognitive factors. Then research has been Increasing income, Standard of living, aligned for qualitative research. Related to Media, Globalization are the factors the study researcher considered all importantly have considered to be spread of consumers around the Anuradhapura city fast foods among the customers. area as his population including high, middle and low level income categories with And when considering the factors children to elders. affecting to consumer buying behavior Gluckman (1986) (13) studied the factors Farhana and Islam 2011(01), influencing consumption and preference for mentioned about Prof. Nunnally as he wine. The explicit factors identified were, suggested in his book Psychometric the familiarity with brand name, the price of properties the ideal sample size for any wine, quality or the mouth feel of the liquid, exploratory research is 40-60 members for taste with regards to its sweetness or dryness sample. Based on the Nunnanlly criteria and the suitability for all tastes researcher selected 120 respondents who have the tendency of consume fast food Sabeson (1992) (14) in his study regularly or occasionally. And researcher stated that, high quality, price and taste of the facilitated stratified sample to select 120 product were the major criteria based on consumers who are using fast foods from which the consumers selected a brand of where sample was enriched including school processed fruits and vegetable products. children, university students, executives Foreigners, entrepreneurs, and non- Kumar et al. (1987) (15) examined executives surrounded Anuradhapura city the factors influencing the buying decision area. The study may enriches being with making of 200 respondents for various food dependent and independent variables where products. Country of origin and brand of the suitable statistical tools are to be facilitated products were cross-tabulated against age, to identify and define the relationship among gender and income. Results revealed that the variables. considered factors were independent of age,

886 The scaled questionnaires had to be Figure 2: Income, Age, Sample composition facilitated to collect data as primary, where the Questionnaires were sent to selected customers with ideal involvement of researcher. Considered variables as Location, Atmosphere, Sales Persons Behavior, Awareness, Price, Quality, Image, Promotion, and Fast Service ware measured through five scale questionnaires as strongly agree, agree, somewhat agree, disagree, strongly disagree.

8. RESULT AND DISCUSSION In relation to the study the response rate was 95% (114 respondents from 120) on motivated supervision of researcher. According to the figure number 1, 67 heads in sample represented male and balance was represented by female. It is 59% and 41% respectively. It says that fast food related dominance may retain on male than female according to the sample.

Source: Research Data

Related to income distribution among the sample 13 respondents were at below income level that was 500-20000 monthly income while 45 represented Source: Research Data middle income level that was 20000-50000 monthly income; 56 consumers represented And related to the pizza consumption, pizza higher income level that was more than was familiar (100%) to everyone in the 50000 monthly incomes. As a percentage it sample as they had consumed pizza at least was 11.5%, 39.5% and 49% respectively. in one time in their life. That implies that pizza is highly attracted by

887 middle income category to higher income awareness about ingredient in a pizza and category. And among them revisited to take awareness of pizza requesting and eating pizza is represented by 23 customers culture are showing dissatisfactory result as including a foreigner out of 56 from higher it shows very low mean value according to income group that were 41.07%. And few the below table 1. customers agreed to revisit from middle income that was 9 (all are foreigners) out of The research model articulated by 45 (20%) customers (figure 3). researcher explained about nine variables where its significance was explored through several dimensions. Location is a major Figure 3: Revisit for pizza hut component when considering the buying 71.93% behavior. 14.91% 13.16% According to the study location of pizza outlets was not attracted well. Parking facility and enough freedom of the location was very poor level as its mean vale ware 2.25 and 2.85 respectively. But location was somewhat satisfactory to the customers as it can be reached in a short time. It is proved through high mean value was 4.13.

Store atmosphere is also capable to attract consumers as enough. Related to study sample not agreed in satisfactory level to interior attraction and store layout in Pizza Source: Research data hut as where very few mean value is shown as 2.48 and 2.73 respectively. According to the research objectives, one objective was related to As a important factor to consumer consumer awareness about Pizza product. At attraction price was not strongly help to the data presentation high consumer convey the value of pizza as it bring 2.89 awareness can be seen on “Pizza as a foods” mean value locating around moderately as it presenting higher mean value and t satisfied. But credibility of pricing at the value that is 4.73 and 104.107 respectively. store and price communication also located But when considering the awareness of around moderate level of satisfaction than various products under pizza brand it is not helping to satisfy customer. And when in the satisfactory level with pizza considering the consumer feeling on healthy promotion as it shows moderate level of ingredient and nutrition of pizza products, mean value and low t value as 3.02 and was not in satisfactory level in 27.424 respectively. And not only that the Anuradhapura area (3.11 & 3.32 mean

888 value). But almost consumers retain around highest significance and consumer somewhat satisfactory level on fast service awareness about pizza products was very of pizza related customer requisitions. poor. And parking facility and interior attraction are slightly significant though Figure 3: Mean, Standard Deviation and T those are very important to consumer value for variables attraction.

And sales person behavior is measure through four dimensions where all dimensions ware in moderate to satisfactory level as shown by bellow table. Among them fast service was the considerable dimensions has contributed to arouse the behavior of sample.

9. CONCLUSION AND RECOMMEN- DATIONS According to the findings of the study it is revealed that consumer awareness about pizza products, pizza culture and pizza ingredient are very poor. Therefore enough attention is required to arouse the customer knowledge about pizza and promotion campaign should be adopted on demand of the regional culture in Anuradhapura area. And not only that when identify the nature of revisit a very few consumers tend to re visit to purchase pizza while rest was going to pizza hut for other snacks than pizza brands. Therefore until the promoting pizza in affordable way to all consumers pizza outlet Source: Research data may works as a general snack bar harming the pizza reputation. Finally when considering the significant contribution of identified And location of pizza hut is variable on pizza fast foods, researcher attracted only for past reaching to customers identified that each and every variables are and location not helps to parking and to give significantly influencing on consumer freedom to customers. Therefore the buying behavior related to pizza fast foods in location should be changed by the pizza Anuradhapura area. Among those variables administration on customer convenience. consumer awareness about “pizza hut” was Not only that the atmosphere of pizza hut

889 also was not attracted enough to customer consumers in Northern Ireland. than they paid on image. Therefore Nutrition and food Sci. 30 (4/5) : research comments to change the store 230- 235. layout to keep elegant layout. Binkley, James K. 2006. “The Effect of Demographic, Economic, and But related to the pizza sales person's Nutrition Factors on the Frequency behavior, it can be maintain further or up of Food Away From Home”. The graded as that was on expectable condition. Journal of Consumer Affairs 2006 And another important thing is customers Vol. 40 No. 2 372‐391. attitudes related to nutrition and ingredient in a pizza is somewhat poor. This attitude Aaker, D.A., 1997, Building brands without should be eliminated to revisit to pizza outlet m a s s m e d i a , w i t h E r i c and to repurchase its fast foods. J o u c h i n m s t h a l e r. H a r v a r d Business Rev. 75 (1) : 39-50. REFERENCES Sundar, K., 1997, Store image of Saravana Bava Supermarket in Cuddalore Nadia Farhana and Shohana Islam (2011), district (A critical study), Ind. J. Exploring Consumer Behavior in marketing, XXIV (4-6) : 25-30 the Context of Fast Food Industry Yarrow, L, Remig, VM, Higgins, MM 2009, in Dhaka City, World Journal of ' F o o d S a f e t y E d u c a t i o n Social Sciences Vol. 1. No. 1 March Intervention Positively Influences 2011. Pp.107- 124 College Students' Food Safety Martin Maiden (2012) "Linguistic Wonders Attitudes, Beliefs, Knowledge, Series: Pizza is a German Word", And Self-Reported Practices', derived from YourDictionary.com Journal of Environment and on 26/05/2013 Health, vol.71,pp. 30-35. Usha v. 2007, a study on buying behavior of Yee, J. and Young, L., 2001, A Public health consumers towards instant food approach to reducing the fat products in kolar district, college of content of meat pies in Auckland. agriculture, dharwad university of J . N e w - Z e a l a n d D i e t e t i c agricultural sciences, dharwad Association. 55 (1) : 22-27. Pizza hut, 4 December 2008. derived from Nandagopal, R., and Chinnaiyan, P., 2003, http://en.wikipilipinas.org/index.p Brand preference of soft drinks in hp?title=Pizza_Hut on 02.04.2013 rural Tamil Nadu. Ind. J. marketing. 33 (1): 14-17. Brown, K., Mcllveen, H., and Strugnell, C., 2000, Nutritional awareness and Ramasamy, K., Kalaivanan, G., and food preferences of young Sukumar, S., 2005, Consumer

890 behavior towards instant food vegetable products- a case study in products. Ind. J. marketing. 35 (6): Coimbatore city. MSc (Agri) 24-25. Thesis (unpublished) Tamil Nadu Agril Univ. coimbatore. Gluckman, L. Robert., 1986, A consumer approach to branded wines. Kumar, K., Ambarish, Jordan, B.B. and European J. Marketing. 20 (6) : 21- Barker Tansu, A., 1987, Made in 31. India, what it means to Indian consumers? Ind. J. marketin g. 17 Sabeson, R., 1992, Consumer preference (9) : 26-34. towards processed fruits and

891 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 892-901 AN EMPIRICAL EVALUATION ON QUALITY OF INSURANCE SERVICES IN RURAL AREAS OF TIRUVALLUR DISTRICT

D.Rajasekar

Abstract

Service sector has become an important growing industry in many economies in the world. After 1991, service industries play a major role in Indian Economy. Most of the services sector are growing very fast compared to the manufacturing sector .Majority of the Manufacturing units are depending on services. Mobile phone, computers, automobile, durable and non-durable products manufacturing units are depending services like telecommunication, internet, advertising and retailing etc.All service providers need some regulation. Measuring service quality plays a vital role in regulating the service providers. Perception and expectation are important factors to measure quality of services. These two factors are closely related to the behaviour of the customer. Customer behaviour will determine the quality of services but their need, wants and requirements will determine the design, functions of the product and services .Predetermining the customer behaviour and their requirements of both are very difficult to measure.

Keywords: Service sector, computers, automobile,

1. INTRODUCTION the service providers. Perception and Service sector has become an expectation are important factors to measure important growing industry in many quality of services. These two factors are economies in the world. After 1991, service closely related to the behaviour of the industries play a major role in Indian customer. Customer behaviour will Economy. Most of the services sector are determine the quality of services but their growing very fast compared to the need, wants and requirements will determine manufacturing sector .Majority of the the design, functions of the product and Manufacturing units are depending on services .Predetermining the customer services. Mobile phone, computers, behaviour and their requirements of both are automobile, durable and non-durable very difficult to measure. products manufacturing units are depending services like telecommunication, internet, 2. NEED OF THE STUDY advertising and retailing etc.All service The corporate world is targeting the providers need some regulation. Measuring rural consumers to promote their product service quality plays a vital role in regulating and services .The rural market share for the

Associate Professor, Amet Business School, Amet University, ECR, Kanathur, Chennai 603112. [email protected], [email protected]

892 Fast Moving Consumer Goods (FMCG) is and friendliness on others. The behaviour greater than ever. Simultaneously equal and lifestyle of the rural peoples must vary importance has been given for various with the urban peoples. The perception and services industry. On the rise of consumer expectation of the rural people or rural market in India predicts that in twenty years consumers must differ from the urban the rural Indian market will be larger than the consumer and also meaning the expected total consumer market in the countries. and suitable service dimension to the rural Rural and Urban customers are differing on consumers. At the same time a new model of the following factors. They are Personality, service quality developed by the researcher Education, Behaviour, Perception, Buying will help to measure the expectations of rural Pattern, Life Style, Belief, Attitude, enmass and fulfill their demands. Occupation and Income. This study will help the management to 3. PROFILE OF TIRUVALLUR analyse the weakness in specific areas of DISTRICT managing services in rural areas .The Tiruvallur a town near to Chennai management has to take essential step in city, giving it a special industrial and locating key areas for development and commercial importance. Existence of many should implement appropriate strategies for academic institutions, production units, developing the same. This research work business establishments, religious will help the management in creating a monuments and temples further enhances quality services for rural customer and in the strategic importance of Tiruvallur turn enhance the image of insurance in rural district for the state of Tamil Nadu. This market. website is an attempt to open a new channel of communication between the people and 5. STATEMENT OF THE PROBLEM the government bodies. We have tried to After globalization many private make it a window to the district insurance companies have learnt that India is administration. a potential area to market their insurance Tiruvallur is a town located on the products. Hence many number of private Chennai-Tirupathi highway, approximately insurance companies made a tie up with forty-four kilometers from Chennai. The famous companies in India and launch their railway station falls mid-way between the products in Indian Soil, But these companies Chennai-Arakkonam railway lines. A small have concentrated their business only in the town, and now the district headquarter of the urban areas and very recently they have recently made Tiruvallur district is identified that 95% of the rural population developing very fast. It is one of thirty-two have not availed insurance policies. Hence districts in Tamil Nadu. Previously, they show special attention to market their Tiruvallur was a town in the district named insurance policies in the rural parts of the Chengalpattu. Tiruvallur is the name of both country. But it is difficult to convince the the town as well as the district. rural consumers. Hence the insurance companies have concentrated on a high level 4. SCOPE OF THE STUDY of quality based services to the potential It is well known that the rural people will prospects. have more politeness, respect, consideration

893 Creating an awareness of various Service quality: A Critical Evaluation types of insurance policies in the rural area “used the performance importance covering various income groups is a difficult paradigm to measure the customers task for the insurance companies. The assessment of the quality of services occupation and income level varies in the delivered by insurance agenst.They rural area and it is very difficult to predict the identified five factors of quality in behaviour and buying pattern of rural insurance i.e. , claims, personal people. The present study made an attempt relationships, products/services, life to identifying the marketing strategies insurance and agent/benefit. They practiced by the insurance companies in the found evidence that agents need to take rural areas through providing high level of measures to improve their customer service quality. perceived service quality as only claims and personal relations. On the 6. RESEARCH QUESTIONS other hand the amount of resources that  How far the rural respondents are they use to promote new products falls. aware of various types of insurance It indicated that insurance agents may policies? have to reconsider their promotional  What types of marketing strategies are advertising strategies. practiced by the insurance companies  Mangala Bakshi and Kumar C.S (2008) to enhance the business volume? in their study “ Assessment of  What are the problems faced by the Customers Perceived Service Quality insured and insurer on quality of in Financial Services” assessed service insurance services? offerings of operating offices of life 7. OBJECTIVES OF STUDY insurance companies, banking  To study the marketing of insurance institutes and mutual funds through services in the rural area customers perception as against any  To measure the awareness level and the standards of the industry.Their study expectation of rural consumers on found the significant difference various insurance schemes. between means of Public Sector Life  To identify the factors that influenced to purchase insurance policies in the Insurance Company and Private rural areas Companies.  To find out the common problem faced by the insurer and insured on quality of 9.METHODOLOGY services. The total sample size is 200 and the  To suggest better ways and means to geographical distribution of respondents in improve the insurance schemes in the the study area within the district. The sample study area. was drawn from stratified sampling method. 8. REVIEW OF LITERATURE The total samples of respondents were  Josep et al (2003) in their study chosen from six blocks of Tiruvallur “Insurance Customers Assessment of District.

894 Villivakkam Block Minjur Block Gummidipoondi Block Tiruttani Block Tiruvallu r Block Poonamallee Block

For the present study the major five  Percentage Method private insurance companies were selected.  Chi Square Method They are ICICI prudential Life Insurance Company Ltd, Bajaj Allianz Life Insurance Framework of analysis company Ltd., Birla Sun Life Insurance The core of the study `measure the Company Ltd., HDFC Standard Life quality of private insurance services in rural Insurance Company Ltd., SBI Life market, the study centers around the Insurance Company Ltd., dependent variable viz.., the level of Data Collection: Primary and Secondary satisfaction and quality perceived by the Data customers and their relationship with related Primary Data: is collected from the independent variable. respondents through well framed questionnaire. The open and closed ended 10. LIMITATIONS OF THE STUDY questionnaire are used to collect the primary  The studies confined to Thiruvallur data. District due to time and cost constraint  Due to LPG policy more number of Secondary Data is collected from private insurance company launch the journals, newspapers, periodicals and their insurance business in Indian soil text books. and present study is restricted with only five private insurance companies. Tools of collection data By virtue of a mass of data obtained Analysis and interpretations from research survey, as well as data from Percentage Analysis secondary sources collected and presented Gender of the Respondents: 61.7 % in the present report, descriptive and of the respondents were males and 38.3% of analytical research were considered most the respondents were females. Age group of appropriate for the study. The research the Respondents: 48.7% of the respondents problems and the questionnaire were well were under the age group of 21 to 30 years framed accordingly. The suggestions offered and 23.8% of the respondents were under the in the end of the chapter of the present age group of 41 and above and 21.7% of the research report emerged from the inferences respondents were under the age group of 31 drawn from the study of the sample to 40 years and 5.8% of the respondents were respondent's information who utilized under the age group of below 20 years. insurance services from private companies Designation of the respondents inferred that in rural areas of Thiruvallur District. The 34.1% of the respondents were self researcher used closed ended and open employed and 30.2% of the respondents ended questions in the questionnaire to were employed and 22.7% of the collect primary data. respondents were agriculturalist and 13.0% 895 of the respondents were professionals and respondents having 10 members and more in others. Hence majority 34.2% of the their family. respondents were self employed. Qualification of the respondents: 47.5% of Chi-square analysis the respondents having of school level T h e p r e m i u m p a y m e n t i s education and 38.2% of them were considered as the dependent variable. The graduates, 11.8% of them were illiterates independent variables selected for the study and 2.5% of them were having other includes Gender, Age, and Educational category such as diploma and professional Qualification, Designation and Family size degree holders. Family size of the of the respondents. The data were analyzed respondents: 55.8% of the respondents were by using simple statistical tools like have 4-6 members in their family and 39.6% Percentage Method and Chi-square test. The of the respondents having 1-3 members in detail of the study are presented in the results their family, 2.8% of the respondents having and discussion 7-9 members in their family and 1.8% of the Table: 1 Gender and Payment of Premium Amount towards Insurance policies Sl.No Gen der Frequency % Min Max Mean SD 1. M ale 1 23 61.5 33 5117 908.54 110 8.49 2. Fem ale 77 38.5 40 5000 796.17 102 3.34 T otal 2 00 100

In order to study the relationship between gender and payment of between gender and payment of premium premium amount towards insurance amount towards insurance policies of the policies. respondents, a Chi-square test has been H1: There is significant relationship applied and the result of the test is given between gender and payment of below premium amount towards insurance Ho: There is no significant relationship policies.

Factor Calculated x2 Table Value D.F Remarks Gender 0.43 1.9 9 2 Not significant at 5% level

From the above table the calculated Hence there is no significant value of chi-square (0.43) is less than the relationship between gender and payment of table value (1.99) ,Hence the null hypothesis premium amount towards insurance is accepted. policies.

896 Table : 2 Age Group and Payment of Premium Amount towards Insurance Policies

S l.No Age Grou p Frequency % Min Max M ean SD 1 Below 20 years 11.6 5.8 41.6 5000 96 9.14 1259.21

2. 21 – 30 97.3 48.65 33.3 5117 831.38 1028.25

3. 31-40 43.3 21.65 45 5000 985.30 1243.33 4. 41 and above 47.8 23.9 3 3.3 5000 80 0.77 959.60 Total 200 100

In order to study the relationship Ho: There is no significant relationship between Age group and payment of between Age and payment of premium premium amount towards insurance policies amount towards insurance policies. of the respondents, a Chi-square test has H1: There is significant relationship been applied and the result of the test is given between Age and payment of premium below amount towards insurance policies.

Factor Calculated x2 Table Value D.F Remarks Ag e Group 4.59 4. 2 6 significant at 5% level From the above table the calculated value of between Age group and payment of chi-square (4.59) is more than the table value premium amount towards insurance (4.2), Hence the null hypothesis is rejected. policies. Hence there is close significant relationship Table: 3

Designation and Payment of Premium Amount Towards Insurance Policies

Sl.No Designation Frequency % Min Max Mean SD 1. Agricultur ist 45.33 22.6 7 41.66 5000 692 .39 881.15 2. Employed 60.3 30.16 33.33 5117 982.39 1209.19

3. Self 68.33 34.16 33.33 5000 870.70 1088.41 Employed 4. Professional 26 13 33.33 4166.66 882.21 1011.43

and Others Total 200 100

897

In order to study the relationship between Designation and payment of between Designation and payment of premium amount towards insurance premium amount towards insurance policies policies. of the respondents, a Chi-square test has H1: There is significant relationship been applied and the result of the test is given between Designation and payment of below premium amount towards insurance Ho: There is no significant relationship policies.

Factor Calculated x2 Table Value D.F Remarks D esignation 2.09 4. 2 6 Not significant at 5% level

From the above table the calculated Hence there is close significant relationship value of chi-square (2.09) is less than the between Designation group and payment of table value (4.2), hence the null hypothesis is premium amount towards insurance accepted. policies. Table: 4 Qualification and Payment of Premium Amount Towards Insurance Policies

Sl.No Qualification Frequency % Min Max Mean SD

1. Illiterate 23.66 11.83 46.66 5000 896.22 1047.87 2. Scho oling 95 47.50 33.33 5000 830.09 10 66.72 3. Gradu ation 76 .33 38.16 33.33 5117 880.11 10 85.32 4. O thers 5 2.5 46.66 4000 1016.66 101 6.66 Total 200 100

In order to study the relationship between Qualification and payment of

between Qualification and payment of premium amount towards insurance premium amount towards insurance policies policies. of the respondents, a Chi-square test has H1: There is significant relationship been applied and the result of the test is given between Qualification and payment of below premium amount towards insurance Ho: There is no significant relationship policies.

Factor Calculated x2 Table Value D.F Remarks Qualific ation 2. 87 4.2 6 Not significant at 5% level

898 From the above table the calculated Hence there is no close significant value of chi-square (2.87) is more than the relationship between Qualification and table value (4.2), hence the null hypothesis is payment of premium amount towards accepted. insurance policies.

Table: 5 Family size and Payment of Premium Amount Towards insurance Policies

Sl.No Family Size Frequency % Min Max Mean SD

1. 1-3 members 79 39.50 40 5117 939.99 1145.49 2. 4-6 me mbers 111 .66 55.83 33.33 5000 812.98 10 19.16 3. 7-9 me mbers 5.66 2.8 3 46.66 5000 926.47 13 23.11 4. 10 and others 3.62 1.8 4 83.33 3000 764.12 89 4.32 Total 200 100

In order to study the relationship between respondents family size and between respondents family size and payment of premium amount towards payment of premium amount towards insurance policies. insurance policies of the respondents, a Chi- H1:- There is significant relationship square test has been applied and the result of between respondent's family size and the test is given below payment of premium amount towards Ho:- There is no significant relationship insurance policies.

Factor Calculated x2 Table Value D.F Remarks Fam ily Size 4.74 4.2 6 significant at 5% level

From the above table the calculated 11. FINDINGS value of chi-square (4.74) is more than the  It is identified that 61.7 % of the table value (4.2), hence the null hypothesis is respondents were males and 38.3% of rejected. the respondents were females.  From the analysis it is noticed that Hence there is close significant 48.7% of the respondents were under relationship between respondent's family the age group of 21 to 30 years and size and payment of premium amount 23.8% of the respondents were under towards insurance policies. the age group of 41 and above and

899 21.7% of the respondents were under organize a special campaign the age group of 31 to 40 years and programme exclusively for parents and 5.8% of the respondents were under the create awareness and necessity of age group of below 20 years. taking insurance policy for their  It is pinpointed that 34.1% of the children. respondents were self employed and  The insured should concentrate to 30.2% of the respondents were create awareness of insurance among employed and 22.7% of the the respondents having large family respondents were agriculturalist and and the marketing force should be 13.0% of the respondents were given proper direction to cover the professionals and others. Hence insurance policy to all the members in majority 34.2% of the respondents the family, family package benefit were self employed. should be covered to attract the  It is identified that 47.5% of the insured. respondents having of school level education and 38.2% of them were 13. CONCLUSION graduates, 11.8% of them were Taking insurance policies among illiterates and 2.5% of them were the consumer creates a debatable issue. The having other category such as diploma Indian consumers think that purchasing an and professional degree holders. insurance policy is a waste, because of its  It is found that 55.8% of the returns after a long period. Convincing the respondents were have 4-6 members in mindset of the prospective buyers to their family and 39.6% of the purchase the insurance policies is a hectic respondents having 1-3 members in task for the sales force organization in their family, 2.8% of the respondents insurance companies. After globalization having 7-9 members in their family and more number of global insurance players 1.8% of the respondents having 10 started their insurance business in Indian soil members and more in their family. with different strategies but all these strategies finds difficult to achieve the fixed 12. SUGGESTIONS target. The awareness level of the customer  From the analysis, it is found that male and their buying behaviour in purchasing respondents have purchased maximum insurance policy were studied and insurance policies then the female quantitative tools were employed for respondents. Hence it is suggested that ascertaining the results. the insurance companies should concentrate for the welfare of females REFERENCES and more policies which covers high Jorge et al. “ Client Satisfaction and Quality level of risk for female should be of Health care in Rural Bangladesh, introduced like Jeevan Sneha Bulletin of the World Health introduced by LIC of India. Organization, Vol79, issue 6,pp 512-  The insurance company should 518,2001.

900 Mangala Bakshi and C.S.Kumar McGraw Hill Publishing, New Delhi, “Assessment of Customers Perceived 2000. Service Quality in Financial Services HDFC Standard Life Insurance Annual Industry” Bimaquest- Vol 8, Issue,2, Report 2011-2012 July 2008. ICICI Prudential Life Insurance Annual Kothari, C.R.Research Methodology, Report 2011-2012. Wishva Prakashan, New Delhi, 2001 Kumar and Jogendra “Insurance: Industry Donald R.Cooper and Ramcis S.Schindler, on Growth Path,” Life insurance Business Research Methods, Tata Today, Vol,1, Issue 9, pp .6-10,2005

901 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 902-913

FACTORS INFLUENCING FOR CHOOSING PROFESSIONAL COURSES: A CASE STUDY OF UNDERGRATUATE STUDENTS OF FACULTY OF MANAGEMENT STUDIES AND COMMERCE, UNIVERSITY OF JAFFNA SRI LANKA

S.Thevahi, N.Luxshana, N.Pamila, P.Chamindakumara & S.Sakeeran

Abstract

Nowadays, following a professional course has been a famous trend among the undergraduates. Professional courses can be followed by anyone with minimum qualification. The purpose of this study is to find out the reasons as to why the undergraduates, who are already qualified for a University degree, choose professional courses. The study reveals an empirical examination of factors influencing for choosing professional courses among undergraduate students, faculty of management studies and commerce, University of Jaffna, Sri Lanka. Researchers divided professional courses under the four disciplines such as Accounting, Marketing, Human Resource Management and Financial Management. The study was conducted using survey design with the sample of one hundred, including 01st and 02nd Year undergraduate students. Primary and secondary data were used to conduct the study. Sophisticated statistical model as “exploratory factor analysis” (EFA) has been used. The factors investigated included such as high level job opportunities, enhancing field related skills, inspired by the role model, associate with current market & geographical area, fulfil the expectations of organization, high level job remuneration, desire to achieve a mastery in a particular field, influence of friends, improve the knowledge, parents' compulsion, get job abroad, prestige in society, self employment, personal interest and financial background. The finding of this study revealed that high level job opportunity plays a major role in choosing professional courses among the undergraduate students.

Keywords: Professional courses, Undergraduates.

1. INTRODUCTION Professional courses have gained Professional courses are the education or importance in the recent years, with the curriculum designed, keeping in mind the graph going high for job opportunities in the need of a particular industry, courses like respective sectors. A professional course this are very focused and future oriented. helps students to get trained and aware of the

Department of Accounting, University of Jaffna, Sri Lanka. [email protected]

902 latest trends in the market and the respective among those faculty of Management studies work environments. These courses can be in & commerce secures the second position in the form of degree or diploma certificates recruiting a large number of students. Every depending upon their curriculum and the year it produces a considerable number of time period. students with managerial skills to face the challenges which prevail in the society. These professional courses are There are five departments in the faculty available in every field, few of the subjects namely : Accounting, Financial or courses available are: Medicine or Management, Marketing, Human Recourse pharmaceuticals, Architecture, Mass Management and Commerce. communication, Photographer, Travel and tourism, Management course and After the three decades of civil war Journalism. there is a dramatic increase in the number of undergraduates those who are following a Professional education is always a professional course. Even though those good thing and sometimes it is mandatory to students are reading a degree programme in become licensed in that particular field. At the faculty simultaneously. But professional the very least, professional education is courses can be followed with the minimum necessary to maintain a license in good qualification. The minimum qualification standing. Licensing certain professions required for most of the courses is three provides the credibility necessary to prove passes in General Certificate Advanced expertise and experience within a certain Level (G.C.E A/L). Therefore it is obvious field. that there should be some factors those influence the students to follow a Particularly the management professional course , those who are already courses focus on interpersonal skills, eligible to follow a degree programme in a techniques for managing time, stress, people university. That decision to choose a and work loads, strategies for effective professional course is influenced by team-work, communication, and solving multiple factor including job opportunities, problems. This practical and highly popular skills & knowledge enhancement, associate programs rapidly develops the key skills with current market &geographical area, and knowledge that enable the new and expectation of the organization, developing office professional to maximize specialization in third year, influence of their contribution to the manager, team and family & friends, personal interest and organization. financial background.

University of Jaffna is the leading Some students are following institution in the Northern Province. It has professional courses for their parent's been fulfilling the academic needs of the wishes & advice. Some others follow to region. There are eight faculties in the achieve a mastery in a particular field. While university (including Vavuniya campus), others following to enhance field related

903 skills and to improve their knowledge. of Management Studies & Commerce, Undergraduates perception to fulfill the University of Jaffna, Sri Lanka. Following expectation of organization also a reason to are the sub objective of this study: choose a professional courses. Role models also influence this students.  To identify the factors those influence the choice of professional courses. Some students prefer to follow  To recognize the factors those professional courses because there is a good influence the choice of professional demand in foreign countries like Middle courses. East , UK , Australia for whom those fully completed or partially completed a 2. REVIEW OF LITERATURE professional courses. Some of the students According to Tennakoon.H.D, follow the courses because they believe that Vidanapathirana.A.K, Sutharsanthe.S they can easily get jobs with an attractive (2005) level of preference scores computed remuneration, without more examinations for each career preference, General or interviews. There is a good prestige in the Medicine, Obstetrics and Gynecology, society for whom those whofollow a General Practice/Family Medicine, General professional courses, that's why some of the S u r g e r y a n d N e u r o l o g y w e r e students are following. areas/disciplines with the highest levels of preference among students. Community Statement of the Problem Medicine, Biochemistry, Geriatrics, The purpose of this study was to Medical Administration and Microbiology examine the factors influencing for choosing had the lowest preference scores. Among professional courses among the first and factors which influenced the career second year undergraduate students Faculty preferences, personal factors scored the of Management Studies & Commerce, highest percentage score (35.03%), University of Jaffna, Sri Lanka. Professional followed by factors within the hospital and courses under management discipline can be c l i n i c a l a p p o i n t m e n t ( 3 6 . 3 3 % ) , divided into four categories, which are occupational factors (29.5%), factors within Accounting, Marketing, Human Recourse the medical school (20.84%) and factors Management and Financial Management. associated with family and relatives(7.6%). Researchers provided with a list of pre- Ejisu-Ashanti (2012) found that out of determined factors so that they could eleven factors deem to influence the choice indicate how much each of the factors of accounting as a major subject long term influenced their professional course choices. earning potential and good initial salary was found to influence students most in choosing Objectives accounting as a major subject with 39% Main objective of this study is to response rate. The rating of 39% of the find out the factors which are influence in the earning potentials shows that future choice for professional courses of first and economic emancipation is taken into second year undergraduate students Faculty account in making current decision on

904 subject major. This was followed by this study, have been identified through a availability of jobs (13%). This means that, discussion with the lecturers of Faculty of majority of business students in various Management studies and commerce, academic institutions major in accounting University of Jaffna and with a sample of ten because it has a variety of job opportunities. randomly chosen students who are These two factors are therefore consistent following professional courses. with the findings of many other studies such as Tan and Laswad (2006). Influence of 3. RESEARCH METHODOLOGY referent(11%) was the third major factor. Data sources This may be due to the fact that, most parents Given the nature of the present and guardians do impose on their wards study it was required to collect data from the which area of academic pursuit they should primary and secondary sources. Primary undertake. This finding is contrary to Ahmed data were collected through questionnaire. et al., (1997) study which suggests that Secondary data were collected from referents had no influence. Also senior high research studies, journals, books and news school accounting was another factor papers. The collected data should be enumerated in the research with preference processed and analysed in order to make the rate of 8%. This low response may be due to study useful to the practitioners, researchers, the fact that career guidance at the senior students and academicians. high level is not adequate for them to make a firm decision. Measures T h e q u e s t i o n n a i r e w a s Andriani Kusumawati (2010) said that at administrated to first and second year least three factors that affected their students of faculty of Management studies decision to choose a university rather than and commerce, University of Jaffna. relying on only one factor. The result Questionnaire is prepared with five point indicated that total expenses (cost) (40), Likert- scaling system. In away, qualitative reputation (36), proximity (33), job prospect data, converted into quantitative data and (20), parents (18) are the five most then details analysis was made with importance choice criteria for Indonesian appropriate statistical tools in order to prove students. The next five factors that the objective. Questionnaire is designed to respondents mentioned most frequently to gather the data. Questionnaire consists of be, in order of decreasing frequency, are twenty five statements to measure the academic quality (17), friends (15), factors influencing for choosing psychological (pre-selected motive) (13), professional courses. Data was analyzed facilities (11) and campus environment (11). using Microsoft Excel and SPSS software programs. Since no one had engaged in reviewing on the subject of factors Sampling influencing on the choice of professional Using the random sampling courses, the factors which are mentioned in technique, a total of hundred and ten

905 respondents were selected as sample of the In the present section, researchers, study. Out of them hundred and two therefore, used Cronbach's Alpha scale as a respondents completed the questionnaire measure of reliability. Its value is estimated and the rest did not return it for unknown to be 0.711 for total professional courses reasons. variables. If we compare our reliability value with the standard value alpha of 0.6 Participants and Procedures advocated by Cronbach (1951), a more Request were made to first and accurate recommendation Nunnally& second year faculty of management studies Bernstein (1994) or with the standard value &commerce university of Jaffna to fill up the of 0.6 as recommended by Bagozzi & Yi's questionnaire. In order to collect necessary (1988) researchers find that the scales used data, after obtaining permission from the by them are highly reliable for factor dean of the Faculty of Management studies analysis. and commerce questioners were issued among the first and second year students Further, researchers tested whether belonging to different ethnicity who come the data so collected is appropriate for factor from different part of the country. The analysis or not. The appropriateness of students also were asked weather they were factor analysis is dependent upon the sample wiling to fill up the questioners. All together size. In this connection, MacCallum, hundred and seven students in both years Windaman, Zhang & Hong (1999) have were surveyed in this study. Researchers shown that the minimum sample size have excluded seven of the participant's depends upon other aspects of the design of questionnaire which were not completed. the study. According to them, as The time frame for completion of the survey communalities become lower the is 2nd of January 2014. importance of sample size increases. In this regard communalities of professional Data Analysis and Presentation courses been shown in table-1.

Table-1: Communalities of the Professional Course's Variables

Professional courses Variables Initial Extraction 1 Q1 1.000 0.744

2 Q2 1.000 0.612

3 Q3 1.000 0.614

4 Q4 1.000 0.061

5 Q5 1.000 0.667 6 Q6 1.000 0.645

7 Q7 1.000 0.741

906 8 Q8 1.000 0.530

9 Q9 1.000 0.473

10 Q10 1.000 0.697

11 Q11 1.000 0.602

12 Q12 1.000 0.713

13 Q13 1.000 0.770

14 Q14 1.000 0.807 15 Q15 1.000 0.583

16 Q16 1.000 0.733

17 Q17 1.000 0.723

18 Q18 1.000 0.639

19 Q19 1.000 0.630 20 Q20 1.000 0.610

21 Q21 1.000 0.672

22 Q22 1.000 0.654

23 Q23 1.000 0.738 24 Q24 1.000 0.686

25 Q25 1.000 0.732

From table-1, it is clear that a sample size of overall matrix is 0.517 (For details please hundred as used in the present study is good see table-2), there by indicating that the for a suitable factor solution because all sample taken to process the factor analysis is communalities are 0.4 and above. Kaiser statistically significant. Bartlett's test of Meyer- Olkin (KMO) measure of sampling sphericity (Barlett, 1950) is the final adequacy is still another useful method to statistical test applied in the study for show the appropriateness of data for factor verifying its appropriateness. This test analysis. The KMO statistics varies between should be significant i.e., having a 0 and 1. Kasier (1974) recommends that significance value less than 0.05. In the values greater than 0.5 are acceptable. present study, test value of chi-square Between 0.5 and 0.7 are mediocre, between 539.206 (P=0.000) is highly significance (as

0.7 and 0.8 are good, between 0.8 and 0.9 are also given in table-2) indicating that the data superb (Field, 2000). is appropriate for the factor analysis. This means that the correlation matrix is not an In this study, the value of KMO for identity matrix. 907

Table 2: KMO and Bartlett's Test

.517 Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

Bartlett's Test Sphericity Approx. Chi-Square 539.206

D f 300

Significant .000

After examining the reliability of [Generally, researchers' recommend as the scale and testing appropriateness of data varimax, details please see Taher, Rahman, as above, researchers next carried out factor & F e r d a u s y, ( 1 9 9 3 ) a n d A t h e r, analysis to indentify the key factors of &Nimalathasan (2009)] professional courses. For this, researchers employed principal component analysis When the original professional (PCA) course variables are analysed by the PCA in this regard has been revealed table-3. followed by the varimax rotation

Table-3: Total Variance Explained

Component Initial Eigen values

T otal Percent of Variance Cumulative Percent 1 3.513 14.051 14.051 2 1.981 7.925 21.976

3 1.909 7.634 29.610

4 1.813 7.253 36.863 5 1.540 6.160 43.023 6 1.339 5.358 48.381

7 1.317 5.268 53.649

8 1.121 4.485 58.135 9 1.086 4.343 62.478 10 1.038 4.150 66.628

908

11 0.956 3.822 70.450

12 0.858 3.431 73.881

13 0.847 3.387 77.268 14 0.764 3.055 80.323

15 0.713 2.852 83.175

16 0.689 2.756 85.931

17 0.61 1 2.445 88.376 18 0.539 2.156 90.532

19 0.482 1.929 92.461

20 0.440 1.759 94.220

21 0.380 1.518 95.738 22 0.346 1.384 97.122

23 0.286 1.144 98.266

24 0.231 0.924 99.190

25 0.203 0.810 100.000

From the table-3, it can be seen that considered significant, 0.40 are considered ten components extracted from the analysis more important and 0.50 or greater are with an eigen value of greater than one i.e., considered very significant (Hair, Anderson, 'rule of thumb' (Tabachnick& Fidell,1996) Tatham & Black, 2003). which explained 66.628 percent of the total The rotated (varimax) component loadings variance. Further, it is worth mentioning out for the two components are presented in here that factor loading greater than 0.30 are table-4. Table-4: Total Variance Explained Component Percentage of Variance Explained Cumulative Percentage of Variance Explained

1 9.425 9.425

2 8.227 17.652

3 6.514 24.167

4 6.4 69 30.635

909 5 6.4 38 37.073

6 6.4 13 43.486

7 6.3 92 49.877

8 5.7 16 55.594

9 5.5 75 61.168

10 5.4 60 66.628

For parsimony, only those factors & Bagi, 1987; Pal, 1997; and Hair, et.al., with loadings above 0.50 were considered 2003). In this regard rotated component significant (Pal, 1986; Pal analysis has been shown in table-5.

Table -5: Rotated Component Matrix for professional courses

Componen t 1 2 3 4 5 6 7 8 9 10 Q13 .739 Q12 .726 Q11 .679 Q5 .604 Q8 .6 67 Q3 .644 Q15 .632 Q16 .748 Q6 .659 Q17 .550 Q24 .7 87 Q25 .7 39 Q22 .790 Q20 .560 Q10 .76 9 Q4 -.639 Q1 .643 Q9 .616 Q7 -.590 Q21 .7 71 Q18 Q23 .825 Q2 -.66 9 Q14 .572 Q19 .546

910

Each of Ten professional courses employment & grade of work with loadings group listed in table-6 is labelled according 0.787 and 0.739 respectively. to the name of the value that loaded most highly for those variables. The higher a Professional courses Group -V: Family factor loading, the more would its test reflect financial background Two variables or measure as professional group (Pallant, ranging from 0.790 to 0.560 belong to 2005; Hema, et.al., 2000). family financial background & want to become a professional. The variables getting highest loading becomes the title of each group of Professional courses Group VI: Personal professional courses e.g. parent's interest This group contains personal expectation- Title of professional courses interest and fulfill the expectation of the group I and the like. organization with loadings 0.643 and 0.616 respectively. Professional courses Group - I: Parent's expectation These group are represented by Professional courses Group - VII: Get job four variables with factor loadings ranging easily without more examination & from 0.739 to 0.604 They are parent's interviews- Only a variable consists in this expectation, friends influence, family group with loadings 0.590. structure & Parents wishes. Professional courses Group - VIII: Good Professional courses Group -II: English demand in foreign This group consists only soundness Three variables ranging from one variable i.e., good demand in foreign 0.667 to 0.632 belong to English soundness, with loadings 0.771. enhancing field related skills & to improve the knowledge. Professional courses Group - IX: Prestige in Professional courses Group -III: Friends the societyOnly prestige in the society following the course This group Friends variable consists in this group with loadings following the course, prefer to get a job in 0.825. private sector &desire to achieve mastery in a particular field with loadings 0.748 and Professional courses Group- X: High level 0.550 respectively. of job opportunity- Three variables ranging from 0.669 to 0.546 belong to high level job Professional courses Group -IV: Self opportunity, inspired by role models & my employment-This group encompasses self district.

911

Table -6: Ranking of Variables according to their importance

Key Customer Satisfaction Factors No. of. Factor Rank Variables Score

Professional course group - 1: Parent’s expectation 4 3.4579 7

Professional course group-2: English soundness 3 3.5347 5

Professional course group-3: Friends follow ing the course 3 3.42090 8 Professional course group-4: Self employment 2 3.7178 3

Professional course group-5: Job opportunities in bank 2 3.8069 2

Professional course group -6: Family financial background 2 3.3812 9 Professional course group -7: Personal interest 3 3.6601 4

Professional course group -8: Get job easily without more 1 3.2871 10 examination

Professional course group -9: Prestige in society 1 3.4653 6

Professional course group -10: High level job opportunities 3 3.8680 1

4. LIMITATION OF THE RESEARCH organization, high level job remuneration, This research has been done with desire to achieve a mastery in a particular the help of the primary data which was field, influence of friends & improve the collected from the first & second year knowledge. High level job and Journalism, undergraduate students of faculty of as w e ll as ot he r u n iv ers ity to evaluate what management studies and commerce, are the factors are more influencing in the university of Jaffna, Sri Lanka. There are choice of professional course and evaluate very few of questions were not answered by how factors are related with students. the correspondence and also the questionnaire is in English language but the REFERENCE students are as Tamil and Sinhala, so the Ather,S.M. &Nimalathasan, B. (2009). language might be a problem for the students Factor Analysis: Nature, Mechanism & when they were answering. Uses in Social and Management Researches. Journal of the Institute of 5. CONCLUSION Cost of Management Accountant of Choice of professional courses are Bangladesh, XXXVII (2), 12- 17. influenced by numerous factors including Andriani Kusumawati (2010) A Qualitative high level job opportunities, enhancing field Study of the Factors Influencing related skills, inspired by the role model, Student Choice: The Case of Public associate with current market & University in Indonesia. geographical area, fulfil the expectations of

912 Bagozzi, R. P., & Yi, Y. (1988). On the Pal, Y. (1986). A Theoretical Study of Some Evaluation of Structural Equation Factor Analysis Problems and Pal,Y., & Models. Journal of the Academy of Bagai, O.P. (1987). A Common Factor Marketing Science, 16(1), 74-95. Better Reliability Approach to Bartellet, M.S. (1950). Tests of Significance Determine the Number of Interpretable in Factor Analysis. British Journal of Factors”, a paper presented at the IX Statistical Psychology, 3, 77-85 . Annual Conference of the Indian Cattell, R.B.(1966). The Scree Test for the Society for Probability and Statistics Number of Factors. Multivariate held at Delhi, University of Delhi, Behavioural Research 1, 245-276. India.Pal,Y.(1997). A New Factoring Cronbach, L.J. (1951). Coefficient Alpha Criterion Based on Principal Factor and the Internal Structure of Tests. Reliability Coefficient's and its Psychometrika, 6(3), 297-334. Comparison, with some well known Ejisu-Ashanti (2012) Factors Influencing Factoring Criteria, Indian Psycological the Choice of Accounting as a Major in Review, 48(3), 187-200. Ghanaian Universities . Pallant, J. (2005). SPSS survival Manual, Field, A.(2000).Discovering Statistics Sydney: Allen and Unwin. Using SPSS for Windows, London: Tennakoon, H.D. & Vidanapathiran, A.K.& Sage Publications. Sutharsan.S (2005) Career preferences Haque,M.M & Taher, A.M.(2007). In Search and the factors influencing their of Latent Relationship among Some selection in fourth year medical Selected Variables Affecting Job students in the University of Colombo Satisfaction: Bangladesh Perspective, S. (1999). Sample Size and Factor Analysis, 1(1), 27-39. Psychological Methods, 4, 84-99. Hema, W., Anura, D.Z., Tilak, F. & Basil, Taher, M.A; Rahman, M .S.,&Ferdausy, S. (- P.(2000). Factors Contributing to the --). Knowledge Management in Small Success of Manufacturing Enterprises and Medium-Sized Enterprises: Issues in Sri Lanka: An Empirical and Challenges in Bangladesh Investigation. Sri Lankan Journal of Perspective, South Asian Journal of Management,5(1&2), 110-130. Management, 9(4): 28-35 Kasier, H.F. (1974). An Index of Factorial Tabachnick, B.G & Fidell,L.S. (1996). Simplicity.Psycometrica, 39, 31-36. Using Multivariate Statistics. New MacCallum , R.C., Windaman, K.F., Zhang, York, Hcorper Collins. S. & Hong, Hair, J.F., Anderson, R.E., Tatham, R.L. & Nunnally, J. C., & Bernstein. (1994). Ira Black, W.C. (2003). Multivariate Psychometrics Theory, New York: DataAnalysis, New Delhi: Pearson McGraw-Hill, Education.

913 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 914-922

FACTORS INFLUENCING FOR CHOOSING OF GENERAL CERTIFICATE ADVANCED LEVEL [G.C.E (A/L)] STREAM: A CASE STUDY OF GENERAL ORDINARY LEVEL [G.C.E (O/L), (2012)] STUDENTS IN JAFFNA TOWN, SRI LANKA.

M.Vinthuja, S.Thanusha, C.Vijayananda, K.Niruthika, J.Vivitha, and Y.Thanarupan

Abstract

Choice of stream is vital for every student future successful career path. Now-a-days students are facing problem when they have to choice the stream. In this view several factors are behinding for the selection of A/L stream. According to the Sri Lankan education system has five streams such as Science, Mathematics, Commerce, Arts and Technology. Out of them, students are compulsory undertaking one. The objective of this study is to determine the factors which influence on choice of A/L stream among O/L students of leading schools in Jaffna town Sri Lanka. The factors are investigated like personal interest, skills & knowledge enhancement, work related concern, parental relations, friends involvement and financial support. The study was conducted by using survey design with a convenience sampling of leadings schools of Jaffna town. The data for this study has been collected by using direct personal interview. The findings of this study revealed that Personal factors are most influencing when choosing of A/L stream among O/L students of leading schools in Jaffna town Sri Lanka. As well as following other factors influencing like family and friends, financial background, school restrictions and job opportunities.

Keywords: Advance Level (A/L), Ordinary Level (O/L), Stream Choice.

1. INTRODUCTION stream and learning the content offered in Everybody has to make choices at this stream. Hence, students can only make different stages in their life. Some of the the most out of schooling through taking the most critical relate to their education, now a streams which will be useful for their future day's schools are significant powerful force education or career. Course-taking in for education of children. Even though they secondary schools has been a central issue in make available a diversity of purposes, a educational research for a long time because major responsibility of schools is to get of its relationship to both educational equity ready students for their future education or and academic excellence. Courses are profession. This preparation takes place, for important for almost all of the students the most part, in the form of students taking regardless of their plans for future.

Department of Accounting, Faculty of Management Studies & Commerce, University of Jaffna, Sri Lanka. [email protected] 914 In this respect, student's stream-taking is an school students when they choosing the important movement in the context of stream, also it's helpful for teacher's parents schooling. The Sri Lankan Advanced Level & school management police makers. (A-level) is a general certificate examination of the ministry of educations. The students 2. OBJECTIVE should study for two years before taking the The primary objective of this study examination. The examination diversifies is to examine the factors which are over five major stream of study, such as influencing in choice of A/L stream among physical science stream (combined O/L students of leading schools in Jaffna mathematics, physics and chemistry), town, Sri Lanka. Following are the sub biological science stream ((botany and objective of this study: zoology), physics and chemistry),  To identify the factors those influencing commerce stream (economics, accounting, the choice of A/L stream among O/L business studies), arts stream (Tamil, Hindu students of Jaffna town leading schools. culture, logic & etc) & technical stream  To recognize personal factors are more (electronics, civil and mechanical influencing in choice of A/L stream engineering, agriculture as well as food among O/L students of leading schools sciences and information technology). In in Jaffna town. each stream, students should face three subjects. Additionally there would be a 3. LITERATURE REVIEW general English test and a common general These parts discuss the literature test. related to the course (stream) choice among the students. In Sri Lanka, researcher could Admission at undergraduate level to not find out any literature reviews directly these government universities is based related to stream choice in advanced level. solely on the results of the G.C.E (A/L) Even though researcher reviews some examination and the Z-score, which literature (course, subject choice) related it considers the difficulty level of the subject. from previous researches. This chapter also Due to restricted facilities admissions have summarizes the literature review and become extremely competitive. In this identifies the knowledge gap. regard many factors influencing choice of The review of the literature that follows has stream. Because it is important their future been organized into two main sections. The education. In this purpose selected first provide an overview of the personal convenience five leading schools in Jaffna factors in relation to the subject choice. town Sri Lanka. Such as Jaffna Vembadi Ending section interpreted other factors Girls High School, Jaffna Hindu Ladies influence when choosing the subject/stream. College, Jaffna Chundukuli Girls College, Jaffna Central College & Jaffna Hindu 3.1 Personal factors College. Twenty students were selected According to Owoyele and Toyobo from each school based on convenience (2008) professional guidance and sampling to formed some useful guideline of counseling services are needed to guide

915 students on how to choose subjects based on guide their decisions about which courses to their academic ability, interest and relevance offer. of such subjects to their future career aspirations. Schools must Endeavour to Several of the previously referenced organize academic and career counseling studies indicated that “interest in the services before such students are asked to subject” was the top or one of the top select subjects. Subject choices are influencing factors in the section of a considered to be significant in determining business major (Malgwi ,2005;Kim ,2002; career paths. Demarie,2003).

Smyth and Hannan (2006) stated 3.2 Other factors that schools vary in the way in which Peel (1998) in Oriahi, Uhumuavbi scientific subjects are made available within and Aguele (2010) stated that students often the school; they may allow certain ability receive conflicting advice from parents, groups to take particular subjects or they teachers, friends and career advisors, and may set prerequisite for taking certain upon entering senior secondary school there subjects (e.g., a student may need to achieve can be a mismatch between expectations and a certain grade in order to be allowed to take actual experiences. The difficulty students subject). may have in obtaining informed advice can influence their choice of science subjects. Hoofman (2002) as cited by Semela (2010) say that the choice of physics as a Millican, Richards and Mann major field of study or taking higher physics (2005) say that one of the major difficulties courses is shaped by students' interest, inspiring students about careers in motivation and prior achievement. engineering is that their main source of information, their teachers are usually not Nicholls and Miller (1984) Found that much better informed than the students student judgment about the difficulty level themselves. of school tasks clearly affect their achievement related cognitions. Tasks Roger and Duffield (2000) found perceived by the students as difficulty (into that schools can influence course up-take his/her skill level) engender lower indirectly through subject packaging for optional subjects and more subtle expectations for success, perceptions of encouragement of the take-up particular control and perception of self efficacy than types of subjects. easy tasks. The literature review has shown that Okakes, Selvin, Karoly and Guiton there are several factors which influence the (1992) found that cited by Smyth and choice of stream among Jaffna district Hannan (2006) schools are found to make leading school students. The factors assumptions about the abilities and needs of reviewed are related personal factors and their student intake, assumptions which other factors

916 Different studies reviewed has 3.3 Summary shown that student ability, interest, Under the literature review the achievement, parents & friends pressure and subject selection is influencing by many school restrictions influence the choice of factors. Personal factors take a major place Advance Level Stream. in subject or course selection. The present study examines the student level variables In present study found that personal that influence high school student's stream factors most influence choosing the choice. These relationships are studied Advance Level Stream among Jaffna district through placing the selected variables. The leading school among ordinary level outcome is the number of stream choice students. affected by personal factors (personal interest, ambition, skill, ability & etc).

4. CONCEPTUALIZATION

Personal factors

Personal Interest of the subject Stream choice

Childhood ambition 1. Arts

2. Commerce English knowledge level 3. Maths O/L result skills & ability 4. Biology

5. Technology

Other factors Family / friends/teachers influence

Financial background School restrictions/available resources resources

5. RESEARCH METHODOLOGY study is comprised of five leading schools This chapter discusses the study students in Jaffna district, Sri Lanka. The design used, location of the study, sample size consists of 100 advance level population and sampling strategies, data students (2015 batch) collected from the collection instruments, data collection and questionnaires. In order to investigate analysis procedures. The population for this factors influencing to their decision in

917 selecting leading schools, this research from Sri Lankan education websites. employed a Likert scale consisting of 5 levels, ranging from level 0 for not 5.3 Sampling design influential to level 5 for strong influential. A The researcher sampled five likert scale is a psychometric scale schools by means of convenience sampling. Hundred students were selected from five commonly involved in research that leading school in Jaffna town with employs questionnaire. convenience sampling in each stream. In each school students who have already made their subject choice. Convenience sampling 5.1 Research Design is a type of non probability sampling, in The study used descriptive survey which people are sampled simply because design. According to Mouton (1996) a they are “convenient” sources of data for survey is used to collect data for describing a researchers. population too large to observe directly. A survey obtains information from a sample of Totally hundred students were people by means of self report, that is, the conducted also following schools were people respond to a series of questions posed selected for data collection purpose, in these by the investigator (Polit and Hungler schools two schools were boys school (1993). In this study the information was another girls schools. Following schools collected through self administered were selected questionnaires distributed to the subjects by 1. Jaffna Vembadi Girls High School the researcher. The design helped to describe 2. Jaffna Hindu Ladies School the factors that influence the choice of 3. Jaffna Chundugulli Girls College streams in leading schools in Jaffna district. 4. Jaffna Central College According to Ogula (1999), descriptive 5. Jaffna Hindu College research design attempts to accurately describe a given situation. This design was 5.4 Data Analysis Procedures used to collect information, record the After administration of the information collected, analyze and report instruments to the respondents the data conditions that existed. collected was examined for completeness and appropriately coded. The data was then 5.2Data Collection and Participants entered in the computer for analysis by the The present study used primary data use of Statistical Package for Social for the analysis. Primary data is data that Sciences (SPSS). The findings were have been newly obtain from related field. In reported in summary form using this purpose used of direct personal interview and questionnaire instrument. Descriptive statistics such as Also data was obtained from advance level percentages, means, histogram and (2015) batch students in Jaffna five leading frequencies were used to present data. schools. Further also used secondary data

918 Reliability Personal factors variable include personal interest of the subject, help future Scale: ALL VARIABLES career path, like sums or empirical subject, like theory subject, childhood ambition, Table 1: According O/L results and skills and ability, Reliability Statistics easy to understand, help to enter university, Cronbach's can obtain best result, improve life style and Alpha N of Items status, Convenience for extracurricular activities, improve skills and knowledge, .603 2 English knowledge level. Researcher consider other factors are parents have worked or are working in Over all result statistically show that the same stream, Parents wish and advice to the items used in the study are valid and undertake the stream, Family financial measure what it is supposed to measure. The background, sister, brother, relations and instrument is reliable (with cronbach's alpha friends influences, More interesting and .603) that meets the acceptable value of 0.60 quality teachers in the stream, More books (sekaran, 2005; hair ET al.2006; Kaiser, are available with related stream in school 1974). library, school restrictions related it, Very good reputation in society, Competitions 6. DATA ANALYSIS PRESENTATION, between students, Related jobs are earning AND DISCUSSION more, Very few syllabus. Based on the findings, description and interpretation were made on the factors Gender of the respondents indicated which influence the choice of advance level that, 58 out of 100 respondents were female stream of Jaffna leading school advanced while the rest of the respondents were male. level students' .The influencing factors This result is not surprising it depicts the dividing into two groups national population trend of more females 1. Personal factors than male and also explains the female 2. Other factors dominance in the advance level students.

Descriptive Statist ics

N Range Minimum Maximum Mean Std. Deviation Personal factors 100 2.79 1.00 3.79 2.8571 .52144

Other factors 100 3.31 .44 3.75 2.2906 .66651

Valid N (list 10 0 wise)

Table: 2 Mean Value of Influencing Factors Statistics

919 It can be clearly seen that personal factors representing the mean value 2.8571 in are more influencing when choosing the addition personal factors standard deviation advance level stream among leading Jaffna less than other factors school ordinary level students. It's

Figure I: Histogram for Influencing Personal factors PF (Personal Factors), OF (Other Factors)

Personal factors having mean 2.86 it with standard deviation 0.521. represent its most influence the decisions Figure II: Histogram for Influencing Other Factors

920 This graph represent other factors having information that will lead students to correct mean value 2.29 .it's represent these stream choice. variables considerable influencing decision It's clear from the study that, personal factors making .but it's less important than the are vital that most influence the choice of personal factors variables.7. Limitation of stream among advance level students in the Study Jaffna leading schools. Other factors also considerably influence. So that now day Jaffna district is a large area. There parents must be know the student personal are many schools. But researcher has factors are most important other than their selected five leading schools, Due to the influence. Also this is help school time frame given by the university it was not management policy makers, students.so possible for the researcher to cover the students must consider first their ability and whole of the district. In addition the skill when they choosing the stream it's researcher was not in a financial position to definitely let to the favorable result in cover the whole district schools. Also advance level. So students can obtain good sample students were few to represent the job in Sri Lanka also foreign countries. population of Jaffna district leading schools; Researcher trying the best for society furthermore questionnaire is not in the student future studies improvement mother language therefore students may be .Researcher expects it's useful for future difficult to understand the other language advance level stream choice. T (English) to fill up the questionnaire. In over all view, the result will represent the narrow The Counseling and Career area in Jaffna district schools. Education Service in the Public Schools need improvements need to give more 8. CONCLUSION AND personal attention to students and advice RECOMMENDATION them which course to choose. Advance level students stream choices are influenced by numerous factors 9. OPPORTUNITIES FOR FUTURE including personal factors and other factors. Researchre research in this area. Personal factors were more influential Also this research has concluded with factors in student's stream choice at advance the help of the mean, histogram and level. In other factors family related variable reliability study. Researcher expectation more influential than other variables. As students interact with their peers their advice is to other researchers do these with help is less important as compared to family of the statistical tools for more clear members, teachers. However teachers are explanations. The preceding literature more influential compared to others. review suggest the need for additional Persons that offer stream choice advice to research, the result of which will allow students should ensure that they are well us to better understand the decision informed so as to provide accurate criteria and process used by advanced

921 level students choose stream and as such achievement motivation. In R. help advance level teachers improve the Ames and C. Ames (Eds.), Research advising process and allow more inform on motivation in education.Vol.1 decision by students. pp.39-73. New York: Academic Press. Owoyole, J.W.and Toyobo, O.M.(2008). REFERENCES Parental Will, Peer pressure, Hoffman, L. (2002). Promoting girls Academic Ability and School interest and achievement in Physics Subjects Selection by Student in classes for beginners. Learning and Senior Secondary Schools. The Instruction, 12, 447-465. School Sciences,Medwell Journals. M i l l i c a n , G . , R i c h a r d s , P. a n d 3(8): 583-586. Mann,L.(2005). The engineering Smyth, E. and Hannan, C. (2006). School link project: Learning about Effects and Subject Choice: The engineering by becoming an Uptake of Science Subjects in engineer. In Radcliffe,D. and Ireland. School Effectiveness and Humpries, J.(Eds.),Proceedings of S c h o o l I m p r o v e m e n t . A n the 2005 ASEE/AaeE 4TH Global International Journal of Research, c o l l o q u i m . S y d n e y , Policy and Practice vol.17, No.3, Australia:ASEE/AaeE September, pp.303-327. Nicholls, J., and Miller, A. (1984). Conceptions of ability and

922 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 923-931

FACTORS INFLUENCE ON HOUSING FINANCE CUSTOMERS

V.Thamodaran

Abstract

Housing Finance is linked with the provision of infrastructure and utilities because it has a clear relationship with the volume of new stock which will be built. As mentioned earlier, housing finance plays an intermediary role between production consumption economy and housing system. Through change in polices in the capital market can be expanded so that a part of the resources flow into housing. Thus, housing finance is an important link in the potential for transforming the creation of housing and social urban investment into strips of property and benefit for the people including low income groups. How the flow of resource helps the wider range of income groups will depend upon the terms and conditions built into the design of housing credit. Generally, housing requires longer term finance than the one in industry

Keywords: Finance, Infrastructure, Utilities

1. INTRODUCTION: provision of infrastructure and utilities Housing Finance plays a vital role because it has a clear relationship with the as an engine of equitable economic growth volume of new stock which will be built. As through the reduction of poverty and mentioned earlier, housing finance plays an prevents slum proliferation in economy. The intermediary role between production demand for housing has increased rapidly consumption economy and housing system. day by day. Therefore, to meet with the Through change in polices in the capital growing housing demand is the aim of the market can be expanded so that a part of the government. To achieve this aim it is resources flow into housing. Thus, housing required to provide the finance for housing finance is an important link in the potential to the people. The liberalization of the for transforming the creation of housing and financial sector of the economy has also social urban investment into strips of become possible by the housing finance. property and benefit for the people including low income groups. How the flow of Housing Finance is linked with the resource helps the wider range of income

Assistant Professor, Department of Business Administration, Annamalai University. 923 groups will depend upon the terms and loans and customer's opinion about the conditions built into the design of housing electronic clearing services of HDFC credit. Generally, housing requires longer limited. The customers agree that the term finance than the one in industry. people's service, products and processes are effective. The company can improve the 2 REVIEW OF LITERATURE: service of updating repayments and Devlin (2002) has expressed that conveying information about RBI investigates the relative importance of guidelines and interest rate changes by choice criteria according to consumers and enabling automatic generated SMS or e- also analyzes difference in the importance of mails to be sent or through tele calling the choice criteria with respect to a number of customers within a time limit of one or two demographic and relative factors. The study weeks. The major factors that influence shows that choosing a home loan institution customers in choosing housing finance on the basis of professional advice is the company are competitive interest rate, most frequently cited choice criteria, closely flexible repayment system, progressive followed by interest rates. Difference in the funding and prepayment penalty. importance of choice criteria with respect to gender, class, household income, 3. OBJECTIVES OF THE STUDY: educational attainment, ethnicity and 1. To analysis the housing finance related financial maturity are apparent. factors such Documentation Process, Interest Rate, Duration of loan, Rashmi Chaudhary and Yasmin Repayment and Customer Services Janjhua (2011) have been pointed out that that influencing the housing finance the satisfaction level and problems faced by customers. customers while availing loans and found 2. To offer suggestions of factors those that the customers of the bank were highly influence the housing finance. satisfied with the home loan services in relation to its services, transparency, time 4. RESEARCH METHODOLOGY taken for loan approval, employee co- The type of research design used operation and query handling, prima facie here is the descriptive research. Descriptive of some problems like procedural delays, research is carried out to describe the lack of knowledge and red-tapisim. The characteristics of customer segment. The results further revealed that the main reason sampling technique used in this research is for people to prefer this bank is the trust of convenience sampling. Convenience the customers in the bank, lower interest sampling is a non probability sampling rates and easy repayable installments. technique where subjects are selected because of their convenient accessibility and Vanaja and Sindhuja (2012) have proximity to the researcher. The sample size examined that the factors influencing is 100 and the study depends on primary customers in choosing a housing finance data. A structured questionnaire is used to for agency, reasons for pre closure of home collection of data.

924 5. ANALYSIS AND DISCUSSION: an attempt to organize and summarize data, After the collection of data coding in order to enhance the efforts of outcome in was done for the purpose of appropriate such a manner that enables to relate the statistical analysis. Analysis was done with critical points with the study objectives.

TABLE 1: HOUSING FINANCEFACTORS ON AGE GROUPS

Housing Finance Age N Mean Std. Factors Deviation ‘F’ Sig. V alue Value Below 25 1 0 18.40 5.835 26-35 2 1 17.90 5.847 Documen tation 36-45 4 3 17.91 5.286 Process 46-55 16 17.75 5.170 .765 .551 Above 56 1 0 21.00 4.082

10 0 18.24 5.320 Total Below 25 1 0 11.40 2.547 26-35 21 9.38 2.729 36-45 4 3 9.79 3.392 Interest R ate 46-55 1 6 10.13 2.363 1.309 .272 Above 56 1 0 11.30 2.669 Total 10 0 10.07 2.989

Below 25 1 0 12.90 3.247 Duration o f Loan 26-35 21 13.81 2.250 36-45 4 3 12.93 2.694 46-55 16 11.88 3.384 1.068 .377 Above 56 1 0 13.60 4.351

100 13.01 2.983 Total Below 25 1 0 18.80 5.391 26-35 21 19.38 4.883

Repayment 36-45 4 3 17.00 3.735 46-55 16 18.13 3.538 1.265 .289 Above 56 1 0 18.50 4.927 Total 10 0 18.01 4.291 Below 25 1 0 25.80 6.512 Custome r 26-35 2 1 21.00 5.413 Services 36-45 43 21.23 5.610 1.810 .133 46-55 16 20.50 5.254 Above 56 1 0 23.10 5.971 Total 100 21.71 5.734

Source: Computed from primary data. ** Significant at 5 % level.

925

Ho: Housing Finance Factors Such accepted. From the above result about that as Documentation Process, Interest Rate, the Duration of loan obtained F value Duration of Loan, Repayment and Customer indicates 1.068 and the P value (0.377) is not Services do not vary with different age group significant of 5% level. Hence the null of Housing Finance customers. hypothesis is accepted. From the above result about that the Repayment obtained F From the above result about that the value indicates 1.265 and the P value (0.289) Documentation process obtained F value is not significant of 5% level. Hence the null indicates 0.765 and the P value (0.551) is not hypothesis is accepted. From the above significant of 5% level. Hence the null result about that the customer service hypothesis is accepted. From the table the obtained F value indicates 1.810 and the P interest rate obtained F value indicates 1.309 value (0.133) is not significant of 5% level. and the P value (0.272) is not significant of Hence the null hypothesis is accepted. 5% level. Hence the null hypothesis is

TABLE 2: HOUSING FINANCEFACTORS ON EDUCATIONAL QUALIFICATION

Housing Finance Educational N Mean Std. Factors Qualifi cation Deviation

‘F’ Sig.

Value Value Illiterate 11 17.55 4.251 Scho ol level 21 18.29 3.757 Documentation UG 30 18.43 5.532 .265 .900 Process PG 24 18.88 6.299 Profe ssional 14 17.21 6.253 Total 100 18.24 5.320 Illiterate 11 9.09 1.921 Scho ol level 21 10.86 3.637 Interest Rate UG 30 9.67 2.905 .911 .461 PG 24 10.46 2.126 Profe ssional 14 9.86 3.939 Total 100 10.07 2.989 Illiterate 11 12.45 3.643 Scho ol level 21 12.33 3.352 Duration of Loan UG 30 13.27 2.273 .652 .627 PG 24 13.08 2.918 Profe ssional 14 13.79 3.446 Total 100 13.01 2.983

926 Illiterate 11 17.45 2.841 Scho ol level 21 17.43 4.956 Repayment UG 30 17.70 4.187 .535 .711 PG 24 18.42 4.471 Profe ssional 14 19.29 4.322 Total 100 18.01 4.291 Illiterate 11 18.64 3.982 Scho ol level 21 22.29 8.174 Customer Services UG 30 21.13 4.890 1.462 .220 PG 24 22.08 5.158 Profe ssional 14 23.86 4.521 Total 100 21.71 5.734 Source: Computed from primary data. ** Significant at 5 % level.

Ho: Housing Finance Factors Such 5% level. Hence the null hypothesis is as Documentation Process, Interest Rate, accepted. From the above result about that Duration of Loan, Repayment and Customer the Duration of loan obtained F value Services do not vary with different levels of indicates 0.652 and the P value (0.627) is not educational qualification among the significant of 5% level. Hence the null Housing Finance customers. hypothesis is accepted. From the above result about that the Repayment obtained F From the above result about that the value indicates 0.535 and the P value (0.711) Documentation process obtained F value is not significant of 5% level. Hence the null indicates 0.265 and the P value (0.900) is not hypothesis is accepted. From the above significant of 5% level. Hence the null result about that the customer service hypothesis is accepted. From the table the obtained F value indicates 1.462 and the P interest rate obtained F value indicates 0.911 value (0.220) is not significant of 5% level. and the P value (0.461) is not significant of Hence the null hypothesis is accepted.

TABLE 3: HOUSING FINANCEFACTORS ON OCCUPATIONAL LEVEL

Housing Finance Oc cupation N Mean Std . ‘F’ Sig. Factors Deviation Value Value Self e mployed 27 19.59 4.70 1 Govt. em ployed 21 15.86 3.51 1 Documentation Private em ployed 24 17.21 6.29 7 2.753 .032** Process Pro fessional 18 18.67 5.09 9 Others 10 21.30 6.11 1 Total 100 18.24 5.32 0

927 Self e mployed 27 11.00 3.74 2 Govt. em ployed 21 9.76 2.38 5 Interest Rate Private em ployed 24 9.13 2.70 8 1.906 .116 Pro fessional 18 9.61 2.35 5 Others 10 11.30 2.94 6 Total 100 10.07 2.98 9 Self e mployed 27 13.33 3.34 0 Govt. em ployed 21 12.33 1.98 3 Private em ployed 24 12.33 1.85 7 2.198 .075 Duration of Loan Pro fessional 18 14.61 3.91 3 Others 10 12.30 3.30 2 Total 100 13.01 2.98 3 Self e mployed 27 17.33 4.04 8 Govt. em ployed 21 16.95 2.53 9 Repayment Private em ployed 24 18.17 4.90 5 1.439 .227 Pro fessional 18 19.94 4.92 9 Others 10 18.20 4.68 6 Total 100 18.01 4.29 1 Self e mployed 27 22.67 7.12 0 Govt. em ployed 21 20.48 4.83 3 Private em ployed 24 21.04 4.89 4 .804 .526 Customer Services Pro fessional 18 23.06 5.97 5 Others 10 20.90 4.77 1 Total 100 21.71 5.73 4 Source: Computed from primary data. ** Significant at 5 % level.

Ho: Housing Finance Factors Such accepted. From the above result about that as Documentation Process, Interest Rate, the Duration of loan obtained F value Duration of Loan, Repayment and Customer indicates 2.198 and the P value (0.075) is not Services do not vary with different levels of significant of 5% level. Hence the null occupational among the Housing Finance hypothesis is accepted. From the above customers. result about that the Repayment obtained F From the above result about that the value indicates 1.439 and the P value (0.227) Documentation process obtained F value is not significant of 5% level. Hence the null indicates 2.753 and the P value (0.032**) is hypothesis is accepted. From the above significant of 5% level. Hence the null result about that the customer service hypothesis is rejected. From the table the obtained F value indicates 0.804 and the P interest rate obtained F value indicates 1.906 value (0.526) is not significant of 5% level. and the P value (0.116) is not significant of Hence the null hypothesis is accepted. 5% level. Hence the null hypothesis is

928 TABLE 4: HOUSING FINANCEFACTORS ON FAMILY MONTHLY INCOME

Housing Finance Family Monthly N Mean Std. Factors Income Deviation

‘F’ Sig.

Value Value Below 3 0000 12 19.42 4.10 0 Documentation 30001-6 0000 30 16.67 4.21 3 Process 60001-9 0000 34 18.00 5.56 5 3.342 .013** 90001-12 0000 10 16.70 4.80 9 Above 12 0000 14 22.29 6.36 6 Total 100 18.24 5.32 0 Below 3 0000 12 9.83 4.32 4 Interest Rate 30001-6 0000 30 10.33 3.12 2 60001-9 0000 34 9.62 2.78 5 90001-12 0000 10 10.10 2.28 3 .462 .763

Above 12 0000 14 10.79 2.42 4

100 10.07 2.98 9 Total Below 3 0000 12 14.17 3.48 6 Duration of Loan 30001-6 0000 30 12.90 3.14 4 60001-9 0000 34 12.56 2.94 6 .983 .420 90001-12 0000 10 14.00 3.19 7 Above 12 0000 14 12.64 1.90 6 Total 100 13.01 2.98 3 Below 3 0000 12 17.33 5.10 5 Repayment 30001-6 0000 30 17.60 4.24 8 60001-9 0000 34 17.97 4.18 1 90001-12 0000 10 18.90 4.84 1 .402 .807

Above 12 0000 14 18.93 3.87 2 Total 100 18.01 4.29 1 Below 3 0000 12 20.83 7.98 7 Customer Services 30001-6 0000 30 21.43 6.43 1 60001-9 0000 34 21.91 4.23 8 .143 .966 90001-12 0000 10 22.40 6.39 8 Above 12 0000 14 22.07 5.35 6 Total 100 21.71 5.73 4 Source: Computed from primary data. ** Significant at 5 % level. 929 Ho: Housing Finance Factors Such housing finance factors on family monthly as Documentation Process, Interest Rate, income of housing finance customers. Duration of Loan, Repayment and Customer Services do not vary with different levels of 7. CONCLUSION: family monthly income among the Housing From the overall analysis it can be Finance customers. said the factors such as Documentation Process, Interest Rate, Duration of Loan, From the above result about that the Repayment and Customer Services are not Documentation process obtained F value influence the housing finance customers on indicates 3.342 and the P value (0.013**) is their age groups and educational significant of 5% level. Hence the null qualification. Occupational level and hypothesis is rejected. From the table the Family monthly income are influence in the interest rate obtained F value indicates 0.462 Documentation Process. Due to high interest and the P value (0.763) is not significant of rate and long sanction time for loan approval 5% level. Hence the null hypothesis is these are the main factors influence the accepted. From the above result about that housing finance customers. the Duration of loan obtained F value indicates 0.983 and the P value (0.420) is not REFERENCE: significant of 5% level. Hence the null Devlin, J.F., (2002). “An analysis of Choice hypothesis is accepted. From the above Criteria in the Home Loan result about that the Repayment obtained F Market”. International Journal of value indicates 0.402 and the P value (0.807) Bank Marketing, 20/5, pp212-226. is not significant of 5% level. Hence the null Jasmindeep Kaur Brar and Pasricha J.S. hypothesis is accepted. From the above (2005). “Housing Loans-A result about that the customer service Comparative study of Institutions”. obtained F value indicates 0.143 and the P International Journal of Commerce, value (0.966) is not significant of 5% level. Vol.58, No.2, April-June, pp71-79. Hence the null hypothesis is accepted. John Mylonakis (2007). “A Research Study of Customer Preferences in the 6. FINDINGS: Home Loans Market: The There is no significant relationship Mortgage Experience of Greek was observed in the housing finance factors Bank Customers”. International on different age groups of housing finance Research Journal of Finance and customers. There is no significant Economics ISSN 1450-2887 Issue relationship was detected in the housing 10 pages 153-166. finance factors on educational qualification La courMicheal (2006). “The Home of housing finance customers. There is no Purchase Mortgage Preference of significant relationship was discerned in the L o w a n d - M o d e r a t e I n c o m e housing finance factors on occupational Households”. Forthcoming in Real level of housing finance customers. There is Estate Economics, Vol.18, No.4, no significant relationship was noticed in the December 20, 2006, p.585.

930 La Cour, Micheal (2007). “Economic Rashmi Chaudhary and Yasmin Janjhua Factors Affecting Home Mortgage (2011). “Customer Perceptions and Disclosure Act Reporting”. The Satisfaction towards Home Loans”. American Real Estate and Urban International Journal of Research in Economics Association, Vol.2, Commerce and Management No.2, May 18, 2007, pp.45-58. Volume No.2, Issue No.9, pages Lakhwinderjeet Kaur (2013). “Consumer 124-127. Behaviour Regarding Performance Ravindra.P.S, Viswanadham.P and Trinadha of LIC Housing Finance Ltd”. Rao (2012). ”Service Quality of IOSR Journal of Business and Housing Finance Companies in Management (IOSR-JBM), ISSN: India”. National Monthly Refereed 2278-487X, Volume No.7, Issue Journal of Research in Commerce No.2, (Jan Feb 2013), pp01-11. and Management, ISSN: 2277- Manjo. P.K (2010). “Benchmarking 1166, Volume No.2, Issue No.2. pp Housing Finance Companies in 132-143. India: Strategies for Enhanced Singh Fulbag and Sharma Reema (2006). Operational Efficiency and “Housing Finance in India: A Case Competitiveness”. European Study of LIC Housing Finance Journal of Economics, Finance and Limited”. ICFAI Journal of Administrative Sciences ISSN Financial Economics, Vol.4, No.4, 1450-2275 Issue 21.pp.21-34. December, pp63-64.

931 Proceedings of International Conference on Contemporary Management - 2014 (ICCM - 2014), pp 932-946

SERVICE QUALITY AND CUSTOMER SATISFACTION: A STUDY OF LISTED BANKS AT COLOMBO STOCK EXCHANGE (CSE) IN SRI LANKA

I. P. Kaluarachchi1 and G. R. M. Gamlath2

Abstract

Banking and finance industry has been rapidly growing over the past decade resulting in an intense competition which has allowed the customers to use multiple banks and switching from one bank to another seeking better opportunity. Most of the banking product developments are easy to be duplicated and when banks provide nearly identical services the main differentiator is the level of service quality and how the customers perceive it. This study attempts to analyze the relationship between the service quality and the level of customer satisfaction and to analyze the influence of each separate service quality parameter on the customer satisfaction. Research was conducted by using a sample of 250 randomly selected customers of CSE listed banking firms located in a slightly remote area. This study measures the service quality in terms of tangibility, reliability, responsiveness, assurance and empathy. Findings revealed that the service quality has a significant influence on the customer satisfaction. Assurance was identified to have the strongest influence on customer satisfaction.

Keywords: Service Quality, Customer Satisfaction, Banking Industry

1. INTRODUCTION demanding, due to rapidly developing Banking and finance industry has information technology and advanced been rapidly growing over the past decade communication channels. The present resulting in an intense competition. By the competitive business environment end of 2011 there had been 33 banks facilitates customers to switch from bank to operating in Sri Lanka consisting of 12 bank easily seeking better options for higher domestic licensed commercial banks levels of satisfaction. Most of the banking including 2 state owned banks, 12 foreign product developments are easy to be banks and 9 licensed specialized banks duplicated and when banks provide nearly (Central Bank of Sri Lanka Annual Report identical services the main differentiator is 2012). Customers in the present banking the level of service quality and how the environment are knowledgeable and highly customers perceive it. This study attempts to

1.Consultant- Department of Management Studies The Open University of Sri Lanka [email protected], [email protected] 2.Assistant Director Finance, Central Environmental Authority, Battaramulla, Sri Lanka. [email protected], [email protected]

932 investigate the service quality and customer Gronroos (2000) presents the satisfaction in relation to listed banks at Perceived Service Quality Model for Colombo stock exchange (CSE) in Sri managers to understand quality through Lanka. consumer behavior and the effects from comparing expectations about a positive 2. LITERATURE REVIEW experience of it and later evaluating it. As per the Central Bank This Model is illustrated in Figure 2.1 Publications, Economic and Social below. Statistics of Sri Lanka 2011 and the Annual Report for the Year 2010 the FIGURE 2.1: PERCEIVED SERVICE network of financial institution has been QUALITY MODEL distributed in the following manner.

As mentioned on Lanka Business Online (LBO), the current banking industry is densely concentrated in the Western Province with nearly 40 percent of the branches of Licensed Commercial Banks and 31 percent of the branches of Registered Financial Companies being present in this area. With respect to banks, the banking density (the number of bank branches per 100,000 persons) is 11.9 in the Source: Customer Loyalty and Satisfaction Western Province against a range of 5.3 to 8.4 in the other provinces. According to above model, experience is made up of the Although the island's banking accumulated prior experiences of the sector was largely unaffected by the client, and this can be split into two global credit crisis as it was not exposed different dimensions: to the risky practices that led to it, it does (i) Technical (outcome)dimension and face structural challenges. The industry (ii)Functional (process-related) is over concentrated, over-banked and dimension. saddled with high costs, especially for distribution, and prevents the optimizat- In other words, technical ion of economies of scale. This in turn dimension is the objective dimension or makes it difficult to attract new invest- “what” customers actually receive in the ments into the sector (Abeywickrama, interaction with the service provider and 2010).

933 the product/service they are left with, According to Kotler (2006), once the interaction is completed. customer satisfaction is the extent to Functional dimension is “how” is the w h i c h a p r o d u c t ' s p e r c e i v e d manner in which the product/service is performance matches a buyer's delivered to the customer. Functional expectations. He further argues that quality of the process is subjective since customer satisfaction depends on the it is based on encounters with the service product's perceived performance provider. relative to a buyer's expectations. If the product's performance falls short of The third step in the above model expectations, the customer is is the Image (Corporate and/or Local). dissatisfied. If performance matches This is how customers will see the expectations, the customer is satisfied organization and its methods of a n d i f p e r f o r m a n c e e x c e e d s operation and is a major element of expectations, the customer is highly quality perception. Further, if the satisfied or delighted. Highly satisfied company has a good image, minor customers make repeat purchases and mistakes will not change customers' tell others about their positive perception of the company, but if the experience with the product or services. company has a bad image, mistakes will yield that customers perceive quality as Oliver (1997) defines customer bad. satisfaction as the customers' evaluation of a product/service in terms of whether The firm can either choose to that product/service has met their needs focus on a technical dimension or and expectations. If it fails to do so, functional dimension strategy. The dissatisfaction with the product/service former is useful when the company occurs. Further, 'satisfaction' is a feeling, needs to find a technical solution to which is a short term attitude that can problems that competitors are not able to readily change in given circumstances. match. He suggests a company must not focus merely on one strategy and forget It is different from observable the other. Company should strike a behaviors, such as product choice, balance between the two dimensions, complaining, and repurchase and it since one cannot exclude the other, in resides in the user's mind. Satisfaction order to increase perceived service commonly has thresholds at a lower quality. However, it is most common to level (under fulfillment) and at a upper have slightly more focus on functional level (over-fulfillment). A consumer's quality according to Gronroos, 2000. satisfaction may drop if he “gets too

934 much of a good thing”. Many people Reliability are the important drivers of focus upon the lower threshold and loyalty. Reliability is strongly correlated neglect the potential for an upper to satisfaction; therefore it is crucial for threshold. Outcomes of satisfaction banks to increase customer loyalty. feelings may involve intent to repurchase, word-of-mouth and Zeithaml and Bitner (2003) complaints. stated that, satisfaction is generally viewed as a broader concept, whereas As per Oliver (1997) these service quality assessment focuses outcomes are also moderated by other specifically on dimensions of service. v a r i a b l e s s u c h a s e x t r e m e Based on the above view, perceived dissatisfaction, where it will not service quality is a component of necessarily generate complaint customer satisfaction. behavior, especially if the consumer believes complaining will be of no use. FIGURE 2.2: PERCEPTIONS OF According to Gronroos (2000), it is QUALITY AND SATISFACTION important not to exceed the satisfaction Reliability Responsiveness Interaction Product level too much, since if it exceeds the Assurance Empathy Tangibles Situational customers' expectations, it will be even Factors higher the next time. This will result in Reliability Responsiveness Customer an up going spiral, where the risk of Assurance Physical Service Qualit Satisfaction Empathy Tangibles service failure increases. Therefore, it is Environment Personal important that the customer satisfaction Reliability Factors Responsiveness Price Assurance Outcome Quality level is increased by small steps, to avoid Empathy Tangibles the risk of unsatisfied customers in the future. Source: De Silva V., Unleash Potential through Effective Service Quality Determinants, 21st Anniversary Convention Association of Bankers, Later Kotler (2006) supported (2009), this view by stating that, 'smart' companies aim to delight customers by As in Figure 2.2 above, service promising only what they can deliver, quality is a focused evaluation that then deliver more than they promise. reflects the customer's perception of However, although customer-centric elements of service such as interaction firms attempt to deliver high customer quality, physical environment quality satisfaction than their competitors, they and outcome quality. Further, customer do not try to maximize customer satisfaction is influenced by perception satisfaction. Further, when it comes to of service quality, product quality and service quality, efficiency and price and also by situational factors and

935 personal factors such as emotional 6. Communication means both responses, their attributions, and their informing customers in a language perceptions of equity. they are able to understand and also listening to customers. As specified in the above 7. Knowing the customer means literature Exploratory research of making an effort to understand the Parasuraman at. el. (1985) revealed that customer's individual needs, the criteria used by consumers in providing individualized attention, assessing service quality fit 10 recognizing the customer when they potentially overlapping dimensions. arrive and so on. These dimensions were Tangibles, 8. Tangibles are the physical evidence R e l i a b i l i t y, R e s p o n s i v e n e s s , of the service, for instance, the communication, credibility, security appearance of the physical facilities, competence, courtesy, understanding/ tools and equipment used to provide knowing the customer and access which the service; the appearance of have been further explained below. personnel and communication 1. Competence is the possession of the materials and the presence of other required skills and knowledge to customers in the service facility. perform the service. 9. Reliability is the ability to perform 2. Courtesy is the consideration for the the promised service in a dependable customer's property and a clean and and accurate manner. neat appearance of contact 10. Responsiveness is to the readiness personnel, manifesting as politeness, and willingness of employees to help respect, and friendliness. customers in providing prompt 3. Credibility is the factors such as timely services, for example, trustworthiness, belief and honesty. m a i l i n g a t r a n s a c t i o n s l i p It involves having the customer's immediately or setting up best interests at prime position. It appointments quickly. may be influenced by company name, company reputation and the As indicated it is important to personal characteristics of the note that the following model is contact personnel. applicable to measure the service quality 4. Security is the customer feeling free and then customer satisfaction is created. from danger, risk or doubt including Ten dimensions discussed above and physical safety, financial security their descriptions served as the basic and confidentiality. structure of the service quality domain 5. Access is approachability and ease of from which items were derived for the contact. SERVQUAL scale. SERVQUAL scale

936 consists of five dimensions (three One such Research has been original and two combined dimensions) conducted by Ravichandran K., as discussed below. Tamilmani B., and Arunkumar S., of 1. Tangibles : Physical facilities, India to identify the key dimensions of equipments and appearance of perceived service quality as well as to personal investigate prevailing service quality 2. Reliability : Ability to perform the level in the private retail banking promised service dependably and consumers in India and to find out a accurately regressive equation on the five 3. Responsiveness: Willingness to help dimensions of the service quality with customers and provide prompt that of the overall service quality. service 4. Assurance : Knowledge and courtesy The means of the quality of employees and their ability to disconfirmation scores were all greater inspire trust and confidence than zero. The extent of the quality 5. Empathy :Caring, individualized disconfirmation in five dimensions is attention the firm provides to its based on the order from the lowest mean customers to the highest mean are Tangibles (.684), Empathy (.619), Responsiveness (.378), Based on the above literature, the Reliability (.243), and Assurance (.336). research gap is identified. Since all quality disconfirmation scores were positive, the subjects' perceptions 3. PROBLEM STATEMENT (actual) were greater than expectations Relationship between service and the subjects were satisfied with quality and customer satisfaction has banks service quality in varying degrees. been a topic which has attracted the The findings also showed that only interest of substantial amount of Responsiveness was found to be researchers worldwide plenty of significant in predicting overall research articles have been published satisfaction with the banking service (b = from each continent. As believed by 0.143,p = .0003), although the r2 is .102. Parasuraman at the time of developing service quality model in 1985, most of A similar research has been the researches that had been conducted conducted by Munusay J., Chelliah S., to analyze the service quality and its and Mun, H. W., of Malaysia to seek and antecedents SERVQUAL model had measure the level of customer been utilized as the main guiding satisfaction and services rendered in the instrument. banking industry in Malaysia.

937 The results of the same have Responsiveness, Assurance and revealed that the combination of Empathy) have a greater impact on Assurance, Reliability, Tangibles, customer satisfaction than that of non Empathy and Responsiveness together human related factors of perceived contributed to 62.1% effect on Customer service quality (i.e. Tangibles). Satisfaction. The r2 for the overall study Reliability and Responsiveness was on the five dimensions, namely resulted to have the greatest impact on Assurance, Reliability, Tangibles, Customer Satisfaction in retail banking. Empathy and Responsiveness, has Therefore, the following research problem is proved that that there is a strong effect of formulated in order to achieve the research these five independent variables on objective of the study “To investigate the Customer Satisfaction. relationship between service quality parameters and customer satisfaction in Sri Lankan listed banks at Colombo Stock It was concluded that the Exchange.” Assurance, Reliability, Empathy and Research Problem “To what extent the Responsiveness have no significant service quality affects consumer satisfaction effect on Customer Satisfaction and only in Sri Lankan listed banks at Colombo Stock Tangibles have significant effect on Exchange.” Customer Satisfaction (P-value < 0.01). The literature survey revealed that many 4. CONCEPTUAL FRAMEWORK AND previous studies have been conducted in HYPOTHESIS TESTING Sri Lanka to explore the importance of In this research, the selected service quality on customer satisfaction population is the listed banking sector companies of Colombo Stock Exchange in in retail banking (Wijetunga, 2003, Sri Lanka. The primary data has been Mallawarachchi, 2004, Wanninayaka collected through a questionnaire for this and Dissanayake, 2007 and De Silva V., study. There are twelve listed banks are in 2010). The most recent study of De Silva the CSE Reports in Sri Lanka which have V., was aimed to find out the degrees of been selected for the purpose of collecting impact of human related factors and non- data for conducting this research. A sample human related factors of perceived of 250 banking customers was taken to service quality on customer satisfaction. collect the data. In order to understand the The above research has concluded that relationships that exist between the service the human related factors of perceived quality and customer satisfaction, the service quality (i.e. Reliability, following conceptual framework is shown as follows

938 5. METHODOLOGY 5.1 Operationalization of Independent variables Table 5.1: Operationalization of Independent Variable

After a thorough review of literature, especially the empirical researches and studies that have been carried out by Parasuraman, Zeithaml and Berry in 1988 and other related researches above formulated conceptual frame work was operationalized in the following manner.

F I G U R E 4 . 1 . : C O N C E P T U A L FRAMEWORK Service based Quality Measure- ment Model developed by Parasuraman et al., (1988) and other related studies.

Source: Developed by the Researchers on

To test for the relationship between service quality parameters and customer satisfaction following hypothesis have been formulated. H1: Improving Tangibles enhances the customer satisfaction. H2: Improving Reliability enhances the customer satisfaction. H3: Improving Responsiveness enhances the customer satisfaction. H4: Improving Assurance enhances the customer satisfaction H5: Improving Empathy enhances the customer satisfaction. Source: Developed by Researchers

939 5.2 Operationalization of dependent 1.2 Format of the questionnaire variable The questionnaire has consists two Review of literature revealed that parts as A and B. The Part- A of the customer satisfaction could be measured by questionnaire was designed to gather frequency the customers do repeated information about the nature of relationship purchases, and reduction of number of existing between the bank and the complains and several other factors for respondent and the demographic features of which the data has to be collected over a long the respondent. Part B of the questionnaire period of time, through direct observations was designed to collect data necessary to and secondary records.Since it has been measure the indicators of independent and decided to gather data by mean of a dependent variable. questionnaire, it was necessary to operationalize the dependent variable too, in 5.3.1 Measurement of independent a manner that could be verbally expressed. variables For instance, literature revealed that The answers listed against each satisfied customers tend to be loyal to the questions ranged from 1 to 5 in a “Likert bank and retain with the bank in long term scale” where; without switching for multiple banking. 1 = Strongly Disagree, Further it was revealed that satisfied 2 = Disagree, customers tend to recommend the bank to 3 = NeitherAgree / Disagree, other colleague too. Thus above two 4 = Agree, indicators, retention and recommendation 5 = Strongly Agree. was taken as the indicators of dependent variable and customers expression about his 5.3.2 Measurement of dependent overall satisfaction too has been included as variables another indicator of dependent variable to The answers listed against each avoid any possible exclusion of other questions ranged from 1 to 5 in a “Likert important indicators. scale” where; 1 = Strongly Disagree, TABLE 5.2: OPERATIONALIZATION 2 = Disagree, OF DEPENDENT VARIABLE 3 = NeitherAgree / Disagree, Measurem 4 = Agree, Variable Indicators 5 = Strongly Agree. ent Retain with the Question bank in long 5.4 Scales No. 21 term The answers for the questions in the

Satisfaction Recommend to Question questionnaire were quantified in following others No. 22 scales. Responses given for the perceived Question level of identified indicators of service Overall No. 8, 11, quality were quantified by assigning scores satisfaction 14, 17, 20 as below,

94 0 Strongly Disagree = 1 Point 5.6.2 Data presentation tools Disagree = 2 Points Data collected from the above Neither Agree/ Disagree = 3 Points survey have been presented in tables and Agree = 4 Points charts mainly and demographic analysis of Strongly Agree = 5 Points the respondents has been presented as pie charts. Scale Applied For Dependent Variable Responses given for the level of 5.6.3 Data analysis methods and tools overall satisfaction and its indicators were Following statistical tools and quantified by assigning scores as below, methods have been utilized to analyze the Strongly Disagree = 1 Point data collected by the survey. The analysis Disagree = 2 Points was done using SPSS software. Neither Agree/ Disagree = 3 Points (a) Percentage analysis has been used to Agree = 4 Points analyze the demographic features of the Strongly Agree = 5 Points respondents and their length of relationship with the bank. 5.5 Population and sample (b) Descriptive Analysis methods such as m e a n a n d s t a n d a r d d e v i a t i o n 5.5.1 Population wereutilized to analyze the level of All the customers of Kuliyapitiya existing service quality of the bank. Branch of an Identified Private Commercial (c) Correlation analysis was used identify Bank the relationship between the above five parameters and customer satisfaction. 5.5.2 Sample & Sampling Method (d) Regression Analysis was used to analyze Out of customers who visit the the degree of influence of each selected private bank between 10 am 2 pm parameter on the customer satisfaction. in 5 working days, 45 respondents were randomly selected to represent the client 6. DATA ANALYSIS AND PRESEN- base of 4,500. TATION The multiple regression analysis is 5.6 Method of data collection, applied to identify the impact of SERVICE presentation & analysis Q U A L I T Y a n d C U S T O M E R 5.6.1 Data collection SATISFACTION of the listed banking Data was collected using a companies at the Colombo Stock Exchange questionnaire, of which the format has been in Sri Lanka. The regression coefficients discussed in section 3.5 above. are expressed according to the designed regression model as in table 1 below.

941 Table 6.1: Regression coefficients

Source: Researchers' collected data

942 Overall Satisfaction = 2.666 + 0.004Tg + Table 6.2: Results of hypothesis testing 0.10Rb + 0.028Rs + 0.192As + 0.093Em Improving Tangibles Rejected Where; Tg = Tangibles enhances the custom er Rs = satisfaction Responsiveness Improving Reliability Rejected As = Assurance enhances the customer Em = Empathy satisfaction Rb = Improving Rejected 2 Responsiveness ReliabilityR is the proportion of enhances the customer variance in the dependent satisfaction variable which can be explained Improving Assurance Accepted by the independent variables. enhances the customer 2 In the present study, R is 0.301. satisfaction

Thus, 30% of the variation in Improving Empathy Rejected

customer satisfaction can be enhances the customer explained by service quality. satisfaction

According to the table 2, the Source: Researcher's collected data regression coefficient of assurance is 7. CONCLUSION statistically significant. Due to the The research was conducted by multiple regression model, the highest selecting a sample 250 customers from magnitude represents the Assurance. It selected Sri Lankan listed banks. Thus indicates that a positive relationship results of the present study may not between customer satisfaction and provide an appropriate insight of the service quality. In this case the behavior of customers of entire banking regression coefficient is 0. 192 at 0.05 industry in Sri Lanka. Objective of the study was to find out the relationship significant level. The hypotheses testing between the service quality and were done in accordance with the results customer satisfaction and though the from the data analysis as follows. empirical finding of the present research

943 it was established that, improving Thus it is recommended for the service quality results in an enhanced banks to improve their service quality in customer satisfaction. Results of the order to enhance the customer study also confirmed the presence of satisfaction, which eventually results in other factors which has a considerable long term loyalty, avoid from switching influence on customer satisfaction, other for multiple banks and also attracting of than the service quality. Results of the n e w c u s t o m e r s t h r o u g h t h e research reflected that the Assurance has recommendation of existing customers. the strongest influence on customer satisfaction while Empathy and One of the most critical and Responsiveness too possesses a slightly contradictory finding of the considerable influence. Being in par present study was the identification of with the results of previous studies “Assurance” as the most significant conducted on the same topic, quality of service quality parameter affecting the Tangibles has shown to possess the customer satisfaction. Most of the weakest influence of customer previous studies have identified either satisfaction out of five parameters Empathy or Responsiveness as the most considered in the study. When perusing significant parameter, yet the results of the results of the analysis of data on level the present study forecasts of a change of of existing service quality in the customer perceptions and behaviors, by subjected bank, it can be concluded that identifying Assurance as the most all the five service quality parameters are significant factor. Anyway, a change of in an acceptable level, while Assurance customer perceptions and behavior is as perceived by the customers has scored possible as a result of a learning process, the highest. Responsiveness and especially, due to the vibrant programs Empathy has scored the lowest. carried out by regulators at present in order to educate the general public to get 8. RESEARCH SUGGESTION rid of fraudulent players in the industry Previous studies on the same and also several critical incidents took topic too have established that service place in the recent past which made the quality has a significant influence on public to seek for Assurance prior to any customer satisfaction. Further, in the of their investing decisions. same way as in present study, previous studies too have concluded that the Anyway since the population of influence of quality of Tangibles on the present study was limited to the customer satisfaction is not significant. customers of a selected private bank,

944 branch of which is located in a slightly Bazan, S. (1998) Customer Service and remote locality (Kuliyapitiya) this result Satisfaction:Comparative advantage and beyond,New England Journal of alone itself is not sufficient to conclude Entrepreneurship, 1 (1): .23-29. of overall industry behavior. Yet, this Central Bank of Sri Lanka Annual Report 2010, slightly contradictory finding brings up 2011,2012 the need for research and study further Chaston, I., (1993) Delivering Customer on the same topic since the outcome of Satisfaction within the SME Client- such studies will be vital for the BankerRelationship, The Service management of banks to change their Industries Journal, 13 (1):.98-111. strategies. De Silva, V., (2009) Unleash Potential Through Effective Service Quality Determents, Further, when considering of the Proceedings of 21st Anniversary problem of the selected bank, the present Convention of Association of Bankers in Sri Lanka: 147-157 study suggests that this may be due to the comparatively lower level of Empathy Dissanayake, D.M.R and Wanninayake W.M.C.B. (2007) A Comparative Study and Responsiveness. It has been of ServiceQuality and Customer identified that apart from the Assurance, Service in Public Sector and Private Empathy and Responsiveness exerts the Sector Commercial Banks,Proceedings next strongest influence on the customer of the 4th International Conference on satisfaction yet, data revealed that, Business Management, Faculty ofManagement Studies and Commerce, customers have perceived those parameters exist in a lower level than the Gronroos,C., (2000) “Service Management and Marketing: a Customer Relationship other parameters. Management approach”, Kotler P., Armstrong G., (2006), Principles of Thus it is recommended for the Marketing, 11th edition, New Delhi: subjected bank to implement strategies Prentice-Hall of India Private Ltd. to improve the epithetical behaviors of Malawaraarachchi, H., (2004) Impact of front line staff, such as being caring and C u s t o m i z a t i o n o n C u s t o m e r provide personal attention to customers satisfaction inCommercial Banks of Sri and encourage staff to respond to clients' Lanka, MBA Research Paper, Postgraduate Institute ofManagement, needs timely. Sri Lanka. Oliver R, (1997) Satisfaction: A Behavioral REFERENCES Perspective on the Consumer, Abeywickrama, C. (2010) Greater Inclusion The Boston:McGrow-Hill. Way Forward for A Stable and Parasuraman, A, Berry, L. L. and Zeitnaml, V. A. Sustainable Banking Industry, (1985) A Conceptual Model of Proceedings of 22nd Anniversary ServiceQuality and Its implications for Convention of Association of Bankers Future Research, Journal of Marketing. in Sri Lanka : 147-152 945 Parasuraman, A., Berry, L. L. and Zeitnaml, V. Postgraduate Institute of Management, A.(1988) SERVOUAL: A Multiple- Sri Lanka. ItemScale For Measuring Consumer Zeithaml, V.A., & Bitner,M.J. (2003). Services Perceptions of Service Quality, Journal Marketing, Integrating Customer Focus of Retailing. across the Firm. New York: McGraw- Sureshchandar, G., Rajendran,C., & Hill. Anantharaman,R. (2002). The Zeithaml, V. A. (1988). Consumer perceptions of relationship between service quality price, quality, and value: a means-end and consumer satisfaction a factor model and synthesis of evidence. specific approach. Journal of Services Journal of Marketing, Vol. 52 No. 3, pp. Marketing, Vol. 16, No. 4, pp. 363-79. 2-22. Wijetunga, D., (2003) Customer Satisfaction in Zeithaml, V., Parasuraman, A., & Berry,L. Sri Lankan Retail Banking: The Role (1990). Delivering Quality Service. ofService Quality, MBA Research at Free Press, New York, NY.

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