1. Project Report
On
“Consumer’s Preference toward Financial Investments”
Submitted
For the partial fulfillment of MBA (F.T) Degree
Of
Barkatullah University, Bhopal (M.P) INDIA
By
Puspendra Singh
(MBA IV Semester)
Under the Supervision of
Prof. Nitin Bhavsar
Technocrats Institute of Technology – Engineering
Bhopal
2010
2. Acknowledgement
I owe a deep intellectual dept to the pioneers in the field who, through their rich
and variedcontributions,have greatlyimprovedour understanding of various issues in
financial services. I am very thankful to Prof. Nitin Bhavsar, who provided me this
great opportunity, which is totally based on field work and continuous learning. I am
highly thankful to our Director Prof. R.K. Bharti and Prof. Sameer Sinha(T&P) and
the whole TIT family for their cooperation.Iam indebtedto a number ofcolleagues and
practicingmanagers for sharing their insights andexperiences withme.I want to thank
Mr. Umesh Kumar (Customer relation officer of LIC Unit II REWA) for his special
guidance for this research.
At last, I want to thanks my family for their great support and assistance in every
manner.
PUSPENDRA SINGH
M.B.A. IV Semester
3. Declaration
I, Puspendra Singh, student of MBA Fourth Semester of Technocrats
Institute of Technology – Engineering, Bhopal hereby declare that the
project Report entitled “Consumer’s preference toward financial
investments” is my own work based on the survey undertaken by me. I also
declare that this report has not submitted to any University/ Institute for
the award of any degree or any professional diploma.
Date:
Puspendra Singh
MBA IV Semester
4. C E R T I F I C A T E
This is to certify that Mr. Puspendra Singh has completed his project work
on the subject entitled “Consumer’s Preference toward Financial
Investments” which is based on the survey/ research under taken by him.
This project report is completed by the candidate under my supervision. It is
an original, unaided research study completed under my supervision to meet
the partial requirement of the MBA (F.T) Degree of the Barkatullah
University, Bhopal.
Date:
(Prof. Nitin Bhavsar)
Supervisor
Forwarded
5. C O N T E N T S
Chapter I : Introduction of topic
Chapter II : Objectives of the study and Research Methodology
Chapter III : Presentation of Tabulated Data and Analysis
Chapter IV : Main findings/ Suggestions
Chapter V : Summary and Conclusion
Bibliography
Annexure
7. Consumer’s preference toward financial investment
Consumers are the core of any business or industry, we are well aware about the
financial industry. In every developing or developed economy, the role of financial sector
is much greater than other sector. It is required to invest more for gaining more profit for
both consumer and company. But due to unawareness mostly consumers are unable to
make their wish for investments. So it is required to aware the investor, so they can make
investment decision. It is profitable for both society and company because the investment
is an amount, which is available for further production and development. And it also
returns a required interest and amount to the investor.
FINANCIAL SERVICES
In general ,all type of activities which are of a financial nature could be bought
under term financial services .the term financial services in broad sense means
“mobilizing and allocating saving” .thus it include all type of activities involved in
the transformation of saving into investment.
MARKETING OF FINANCIAL SERVICES
Marketing of financial services poses a challenging problem to a service designer
.Unlike a product , the financial services has to present a uniform service .A designer
has to bring to bear all his professional skills in designing such a service.
CLASSIFICATION OF FINANCIAL SERVICES
CAPITAL MARKET INTERMEDIARIES: The capital market services consist
of term lending institutions and investing institutions which mainly provide long
term funds.
8. MONEY MARKET INTERMEDIARIES: It consists of commercial Banks, co-
operative banks and other agencies which provide only short term funds.
Hence, the term financial services industries include all kinds of organization which
intermediate and facilitate financial transaction of both individuals and corporate
customers.
GROWTH OF FINANCIAL SERVICES
The Government of India regulates through Reserve Bank of India, the operation of
both Indian and Foreign banks and foreign companies. RBI uses cash reserve ratio
(CRR) and statutory liquidity ratio (SLR) as critical elements. It issues from time to
time firm revision of interest rates and other foreign exchange regulations.
Today banks use magnetic ink character recognition cheque (MICR).banks automated
clearing service (BACS), clearing home automated payment system (CHAPS) cash
dispensers (CDs) automated teller machine (ATM) ,point of sales terminals (POS)
etc.
NEW FINANCIAL PRODUCTS AND SERVICES
Today the importance of financial services gaining momentum all over the world. In
these days of complex finance, People expect a financial service company to play very
dynamic role not only as a provider of finance but also departmental store of finance.
With the injection of the economic liberalization policy into our economic and the
opening of the economy to Multinationals, the free market concept has assumed much
significance. As a result, the clients both corporate and individuals, are exposed to the
phenomena of violently and uncertainty of stock market and hence they expect the
financial services company to innovate new products and services as to meet their varied
requirement.
9. When we talk about financial services, the consumer is very sensitive because of
some reasons:
From a long time we belief in state owned financial services like
LIC and government owned banks.
A continuous piratic now converted in our general habit. (Means
perception about government and private firms).
There is a fear in public mind that a private company may run
away from country or declare bank corrupt her self.
10. FINANCIAL SERVICES IN INDIA
In last few years, India has emerged as the one of the most rapidly growing
economies in the world. India has been categorized with nations like Brazil, Russia and
China (BRIC Nations) who are going to be the prime drivers of world economy in next
few decades. Since the time, India first opened its gates to foreign investment (FDI &
FII), there has been a complete turnaround. Now the traditional Hindu rate of growth is a
thing of past and clocking 8%-9% GDP growth rate is the common norm. India along
with other Asian powerhouse China makes for the fastest growing nations in the entire
world.
Even if we take the case of ongoing global recession, India has managed to
perform far better than other nations. Right from banking system to financial regularities,
the country has thrived on discipline and out-performance. The booming Indian economy
resulted in widespread growth and arrival of new industries. The most sparkling
phenomenon is in form of financial market of India.
Financial services in India has taken a giant leap from the days of standing in banks
queue for several hours for opening a saving account or trying to get some fixed deposits
(FD) done. The financial services have increased manifold and now people have the
choice to choose the one that most suitably fits the bill.
There are several services like broking firms, investment services, financial
consulting, evergreen national banks, numerous private banks, mutual funds, car and
home loans, equity market and other banking services. Services are many and offered by
blue chip names of the industry. Most of the companies in financial segment offer
taxation services, project consultancy services and all the services of wide financial
gamut.
11. Whether it’s taking a car loan or booking your favorite house, going for
pension plan or getting your child insured, numerous attractive financial services are
available at affordable costs. Personal banking services have acquired an altogether new
meaning. Now customers have multiple choices to choose from. One can find all the
financial services on the internet that are just a call away.
Saving of household sector in financial asset:
13. GEOGRAPHICALAREA OF STUDY
The study is basically based on use of financial product by people of few districts of
MP. For this, a study is conducted in REWA, PANNA, SATNA and BHOPAL. In
Bhopal only city area is studied and on other places rural and tribal areas are also
studied. In this study Bhopal is considered as a fully urban area where as Rewa, Satna
and Panna are considered as semi- urban and rural and tribal areas are taken from
Rewa and satna. In case of rural area those part of districts considered which are not
to far from town area where as the tribal areas are those where the person belong from
SC and ST are living so it can also said that these are a part of the same rural area
where the study was conducted.
In urban, area almost all modern facilities are available. And in current era these
modern facilities are also available in semi urban areas. But in case of rural the
situation are not so positive and if we talk about tribal area the situations are totally
negative means there is no proper facilities available for daily life. Means the life is
very tough in such area. But the citizen of tribal area also makes some investments
with banks and Insurance companies (basically with government companies).
In rural area, it was seem that the educational level of society is quite good and if we
talk about the financial status, it is also quite impressive. But a common thing is that
they are almost interested to invest in government companies and banks. And a type
of relational selling of financial product is seen there means people are purchasing the
investment products for their relative agents of the company but condition is the
company should be government owned.
In semi urban area, the people are influenced by both areas rural and urban. In
these area the preference goes with some how profitable investment means the
consumers are not considering the risk factor too much and they are willing to earn
much for these they are not feeling any discomfort in investment planes of private
companies. In urban area, conditions are too liberal means the consumers are
investing for only profits nothing ales.
14. Financial Services
The Indian economy is estimated to have grown by 7.4 per cent in 2009-10.
According to the latest Central Statistical Organization (CSO) data, financial services,
banking, insurance and real estate sectors rose by 9.7 per cent in 2009-10.
As per the Securities and Exchange Board of India (SEBI), number of registered
Foreign Institutional Investors (FIIs) as on May 31, 2010 was 1710 and the cumulative
investments in equity since November 1992 to May 31, 2010, was US$ 77.2 billion ,
while the cumulative investments in debt during the same period were US$ 13.4 billion .
The total FII inflow in equity during January to May 2010 was US$ 4.6 billion while it
was US$ 5.9 billion in debt. Net investment made by FIIs in equity between June 1, 2010
and June 14, 2010 was US$ 530.05 million while it was US$ 875.73 million in debt, as
per the latest data released by SEBI.
The average assets under management of the mutual fund industry stood at US$
170.46 billion for the month of May 2010, as compared to US$ 135.58 billion in May
2009, according to the data released by Association of Mutual Funds in India (AMFI).
As on June 4, 2010, India's foreign exchange reserves totalled US$ 271. billion, an
increase of US$ 9.87 billion over the same period last year, according to the Reserve
Bank of India's Weekly Statistical Supplement.
Private equity (PE) firms invested about US$ 2 billion across 56 deals during the
quarter ended March 2010, according to a study by Venture Intelligence, a research
service focussed on PE and merger and acquisitions (M&A) transaction activity in India.
The amount invested during the January-March 2010 quarter was the highest in the last
six quarters. The figure was significantly higher than that during the same period last year
(January-March 2009) which witnessed US$ 620 million being invested across 58 deals
and also the immediate previous quarter (October-December 2009) where investments
worth US$ 1,681 million were made across 102 deals.
Also, a study by Project Finance International (PFI), a source of global project
finance intelligence and a Thomson Reuters publication has ranked India on top in the
global project finance (PF) market in 2009, ahead of Australia, Spain and the US.
The study said the main market for PF in 2009 was the domestic Indian market,
which raised US$ 30 billion, accounting for 21.5 per cent of the global PF market. This
was up from US$ 19 billion in 2008.
15. Qualified Institutional Placements (QIPs)
QIP is a capital raising tool, whereby a listed company can issue equity shares, fully
and partly convertible debentures, or securities other than warrants, which are convertible
into equity shares, to a qualified institutional buyer (QIB).
In 2009, Indian companies had raised close to US$ 7.13 billion by way of 45 QIP
issuances.
Stock markets
According to data from Bloomberg, India's market cap as a percentage of world market
cap was 2.8 per cent as on December 31, 2009.
In 2009, there were 21 IPOs that raised US$ 4.18 billion as compared to 36 IPOs
in 2008 that raised US$ 3.62 billion.
Further, according to ICICI Securities, Indian companies are likely to raise up to US$
42.43 billion from the primary market over the next three years. According to Madhabi
Puri-Buch, Managing Director and CEO, ICICI Securities' nearly US$ 20 billion will be
raised from the initial public offer (IPO) market this fiscal (2010-11), of which around
US$ 8.49 billion would be from the public sector and an equal amount from private
companies.
Moreover, on the back of an increase in the participation of agriculture and other
commodities, the 23 commodity exchanges posted 50 per cent year-on-year growth in
turnover in the April-February period of 2009-10, to touch US$ 1.53 trillion, according to
the commodity markets regulator, Forward Markets Commission (FMC).
Insurance
India is the fifth largest life insurance market in the emerging insurance economies
globally and the segment is growing at a healthy 32-34 per cent annually, according to
the Life Insurance Council.
According to the Insurance Regulatory and Development Authority (IRDA), total first
year premium collected in 2009-10 was US$ 24.64 billion, an increase of 25.46 per cent
over US$ 19.64 billion collected in 2008-09.
16. Further, according to IRDA, in April 2010, life insurance companies collected first
year premium worth US$ 1.29 billion, as compared to US$ 810.9 million in the
corresponding period of 2009.
The life insurance industry is expected to cross the Rs 3 lakh crore total premium
income mark in 2010-11. “This year, we are expecting a growth of 18 per cent in total
premium income. If achieved, it is expected to cross the US$ 64.4 billion mark,” said SB
Mathur, secretary general, Life Insurance Council. Total premium income, at US$ 56.04
billion, rose 18 per cent during 2009-10, against US$ 47.6 billion in the previous year.
Banking services
According to the weekly statistical supplement (WSS) of the Reserve Bank of India
(RBI), Indian bank loans represented a rise of 19.1 per cent as of June 4, 2010 while
deposits were up 14.3 per cent from the previous year.
Furthermore, outstanding loans showed an increase from US$ 12.39 billion to US$
703.5 billion in the two weeks to June 4, 2010.
The WSS reflected that bank deposits rose by US$ 3.24 billion to US$ 975 billion in
the two weeks to June 4.
Exchange rate used: 1 USD = 46.74 INR (as on June 2010)
18. DESIGN OF STUDY
Research Design
The study is a descriptive, and it contains a questionnaire of 13
questions. The questionnaire was filled by the target consumers of
financial services.
PRIMARY OBJECTIVE OF THE STUDY
Primary objective of the study is to analyses the customer preferences
toward financial Investments at present era.
SECONDARY OBJECTIVE
a) To analyses the attitude of the customers towards Mutual funds, Commodity
& STOCK MARKET investments.
b) To analyses the attitude of the consumer toward GOLD and Real
State investments.
METHOD OF DATA COLLECTION
The data was collected from the customer by adopting the method
of Questionnaire.
TOOLS FOR TRACKING AND MEASURING OF CONSUMER’S
PREFERENCE TOWARD FINANCIAL INVESTMENTS
Customer satisfaction we can measure by two basic methods they are:
1. COMPLAINT AND SUGGESTION SYSTEM
A customer-centered organization makes it easy for its customer to deliver
suggestions and complaints. Many restaurants and hotel provides forms for guests to
report likes and dislikes. Some customer-centered companies P&G General Electric,
LIC of INDIA, Whirlpool-establish hot lines with toll-free 800 telephone numbers.
Companies are also adding web pages and e-mail to facilitate two-way
19. communication. These information's flows provide companies' with many good ideas
and enable them to act quickly to resolve problem.
2. CUSTOMER SATISFACTION SURVEYS
Studies show that although customers are dissatisfied with one out of every
four purchases, less than 5% of dissatisfied customer will complain. Most
customers will buy less or switch suppliers. Complaint levels are thus not a good
measure of customer satisfaction. Responsive companies measure customer
satisfaction directly by conducting periodic surveys. They send questionnaires or
make telephone calls to random sample of recent customer. They also solicit
buyers, views on their competitors' performances.
Whole collecting customer satisfaction data, it is also use fuel to ask additional
questions to measure re-purchase intention; this will normally be high, if the
customer satisfaction is high. It is also useful to measure the likelihood or
willingness to recommend the company and brand to others. A high positive
word-of mouth score indicates that the company is producing high customer
satisfaction.
21. Data Collection
Primary Data:
The primary data has been collected by questionnaire.
Secondary Data
For this, I prefer to internet mainly and also some news paper and magazines.
Statistical Method Used
Tabular representation Percentage Pie chart bar diagram
Important Note:
Data is collected from only those persons who were aware about the financial
investments and financial services.
RESEARCH METHODOLOGY
The primary objective of my project is to study the customer perception
toward financial services. To achieve this objective a sample consist of 100
customers were studied. The selected customers were interviewed schedule
prepared on the sublet.
The answer was tabulated and the results were presented in the form of
table and charts Questionnaires were given to management staffs and technical
staffs to know their opinion. Before preparing the questionnaires, I discussed
with Mr. Umesh (Customer relation officer of LIC Unit II REWA). Thus his
questionnaires and the interview schedule was confining to the subject.
And for secondary objective, I put some questions about the subject.
QUESTIONNAIRE METHOD
A detailed questionnaire was prepared on the basis of customer
value and satisfaction done in mind to come out with the effective
solutions, Data was collected from various other sources like journals,
libraries, reference book and also from various employees of LIC.
22. LIMITATION OF THE STUDY
The study is subjected to the following limitations:
a. The survey is based on the sample size of 400.
b. Since customer value and satisfaction is a psychological concept the
answer may depend upon time, moods and mentality of the customer.
c. Presence of sampling errors.
d. The study could have been made more elaborate, but if was confided to
limited number of respondents due to constraints.
e. Customer value and satisfaction is a highly sensitive topic and
many of the respondents were not honest with their answer and
noticed to be reluctant to openly voice their problem, in spite of being
assured that the response would be highly confidential.
24. REVIEW OF LITERATURE
The whole approach of marketing pivots around the tenet of meeting the consumer
wants, if is essential to understand what the customer wants, how he/she perceives the
products (Service), what exactly does he/she wants to derive out of the
products (Service), how does he/she make the brand choice decision, what are the
sources of information and influence processes? Etc.
In order to take decision any marketer would constantly monitor such information
and obtain continues feed back of the trends in the market. As such, marketing
research, trade channel behavior, and competitive actions etc. It provides a link age
between the corporate environment and the marketing organization. Marketing
research thus may be viewed as an aid for tackling problems in marketing.
CUSTOMER VALUE AND SATISFACTION
The pay to generating high customer loyalty is to deliver high customer value.
According to Michael Lanning, in his Delivering Profitable Value, a company
must develop a competitively superior value proposition and a superior value -
delivery system. A company's values proposition is much more than its positioning
on a single attribute, Its is a statement about the resulting experience customer
will have the offering and their relation. shop with the suppliers. The brand must
represent a promise about the total resulting experience that customer can expect.
Whether the promise is kept depends upon the company's ability to manage its
value-delivery system. The value delivery system includes all communications
and channel experience the customer will have on the way to obtaining the offering.
A similar theme is emphasized by Simon Know and Stan
Macklan in their competing on value. Too many companies create a value
gap by falling to alight brand value with customer value. Brand marketers try
to distinguish their brand item other buy a slogan or with a unique selling
25. proposition or by augmenting the basic offering with added services. But
they are les successful in delivering customer value, primarily, because
their marketing people focus on brand development whether customer
will actually receive the promised notice propositions will depend upon the
marketer's ability to influence various Cole processes. Know and Maklun wan
company's Cole processes as designing the brand profile.
In addition to tracking customer value expectations and satisfaction,
companies need to monitor their competitor's performance in these areas. For
example, a company was pleased to find that 80 percent of its customers
said they were satisfied. Then the CEO found out that its leading competitions
attained a 90 percent customer satisfaction score. He was further dismayed
when he learned that his competitions was aiming to reach a 95 percent
satisfaction score.
27. Preference towardLife Insurance
In case of LI, I feel that Rural and tribal are much interested with compare to urban
class. But there is a problem related with finance, some how they lack the ability to pay
regular premium, we found that only 10% of tribal are able to maintain the regular
premium. My study held on 400 House hold of all area (each containing 100). The study
says that the main consumers are the rural for LI. The portion of semi-urban and urban
is displayed in the pie-chart.
Preferences toward life insurance………………….
Customer segment Percentage of preference
Urban 42%
Semi-urban 28%
Rural 20%
Tribal 10%
Interpretation:
It seems in study that in case of LI, rural and semi urban have more investments than
other its approx 70% of total investment in terms of policy holders. Where as, in tribal
area their savings are less and they are also unaware about other financial investment
policies. The contribution is approx 20% in terms of policies.
10%
42%
28%
20%
Life insurance
tribal rural semi-urban urban
28. Preference towardReal State investment
We cannot consider it as a part of financial investment but due to its use it also tends to
a financial investment. I found tribal are not willing to invest in investing in real state,
and if they invested in some cases they are not using it as a financial investment means
they are not ready to sale it again. In case of rural, they are willing to invest in real state
(basically agricultural land), and they are also not interested to sell it again. And there is
a difference, in case of urban; they use it as an investment.
Preferences toward real state investments………………….
Customer segment Preference
Urban 40%
Semi-urban 25%
Rural 30%
Tribal 5%
Interpretation:
Although real state investments are not treated as financial investments in past but at
present it is a major financial investment source. It seems in research that urban are
contributing approx 40% in these investment. But rural and tribal are not treating this as
pure financial investment. Although, they are investing in this field of investment.
5%
30%
25%
40%
Real state Investment
tribal rural semi-urban urban
29. Preferences toward gold investments
In case of investment in gold, some method of investment available, like gold certificate,
gold biscuits, jewelry etc. In case of tribal, they are willing to get gold but unable to
spend money and in rural area they also lack the ability to spend money but in case of
urban area they pose the ability to spend money on it. They are using it as financial
investment.
Preferences toward gold investments…………………
Customer segment Preference
Urban 40%
Semi-urban 34%
Rural 23%
Tribal 3%
Interpretation:
At present, gold is also treated as a financial investment. Tribal are not able to invest in
this section due to higher cost. But it is preferred by all areas. And urban (40%), semi
urban (34%) and rural (23%) are investing in this section according to their capacity.
3%
rural
23%
semi-urban
34%
40%
Gold
tribal rerul semi-urban urban
30. Preferences toward mutual funds
In case of mutual fund,urbanarea holdmaximummarketshare.The problemwithrural areais
the lack of awareness.Thereforetheyare unable touse suchfinancial services.Soitisnecessary
to educate themforthe purpose to maximize marketshare anotherproblemistheireducation
level andslowspeedof news.
Preferencestowardmutual funds…………………..
Customer segment Preference
Urban 58%
Semi-urban 40%
Rural 2%
Tribal 0%
Interpretation:
There is no investment made on this segment by tribal due to unawareness and over their
financial capacity. And rural are also not invested in this due to unawareness and over
documentation problem. But there is a hope because 2% rural are sowing their interest in
this segment. This segment is totally dominated by urban and semi urban area, with total
holdings of 98%.
0%
2%
40%
58%
Mutual Fund
tribal rural semi-urban urban
31. Preferences toward commodity and stock market
In case of stock and commodity market, the situation is going to more critical due to the
maximum population of INDIA does not know a single thing about it. The market totally
exists in urban area. So it is necessary to educate rural to maximize Indian capitalization
in Indian economy.
Preferencestowardcommodity&stockmarket……………………………….
Customer segment Preference
Urban 76%
Semi-urban 23%
Rural 1%
Tribal 0%
Interpretation:
This segment is also untouched by tribal and rural due to unawareness. But 1% rural
invested on this segment. This is basically urban dominated segment with 76% of total
investment (not in terms of money).
0% 1%
23%
76%
Commodity& Stock Market
tribal rural semi-urban urban
32. Preferences toward saving account
People generallynotpreferringitdue toa fix amountof interestpaidonit.The mainmarket
share of banksavingaccount isrural area.We alsoinclude fix depositonit.FDis alsogenerally
preferredinrural sector.Theyare unaware about investments,sotheyholdthere moneyin
termsof liquid.
Preferences toward bankinginvestments……………..
Customer segment Preference
Urban 45%
Semi-urban 37%
Rural 15%
Tribal 3%
Interpretation:
The investment pattern shows that people of tribal and rural areas are able to invest in the
investment segment with approx 18% liking. And other section of society, who consider
as rich and well educated are also have a great attachment with such investments(approx
82% investment by urban and semi-urban).
3%
15%
37%
45%
Bank saving account , FD, other saving &
investments with bank
tribal rural semi-urban urban
33. Studyof consumer’s perception in case of companywisepreference……..
(Insurance: LI &GENERALINSURANCE)
When I asked the question related with preference of consumer toward companies, a
strong opinion comes to front that is all most all Indian consumers preferred
government companies like LIC,GIC etc. .
The preferences are presented in following graphs:
(Note:datacollectedfromthose personswhoare insurance policyholder.)
Urban SEMI-Urban Rural TRIBAL
GOVT.COMP. 52 65 90 97
PRIVATE COMP. 27 7 3 0
BOTH G&P COMP. 21 28 7 3
0
20
40
60
80
100
120
Percentageofconsumers
Preferencestowardinsurance companies
34. Preference toward banks……….
In the study, most of the people said that they prefer govt. Bank. In India firstly all
banking operations are done by government sector therefore now there is a resistance
occurs in case of change.
(Note:datacollectedfromonlybankaccountholders.)
0
10
20
30
40
50
60
70
80
90
100
URBAN SEMI-URBAN RURAL TRIBAL
GOVT BANKS 64 77 94 98
PRIVATE BANKS 13 8 2 0
BOTH G&P BANKS 23 15 4 2
AxisTitle
Preferencetoward banks
35. CONSUMERS PERCEPTION TOWARD INVESTMENTS AND
FINANCIAL SERVICES ON THE BASIS OF STUDY:
All section has their different perception about investment services so we can
understand it as below:
Urban area: In this area, it is seen that awareness level of consumers is quite good but
their believes are mostly with government owned companies like LIC, it dose not matters
that the investment returns are less in case of government companies.
Semi Urban area: In this area, it is seen that the awareness level of consumer is quite
good but in case of market investments they are warring about market risks. And they are
also influenced by rural consumers due to maximum belong from rural areas. Their belief
is also in government owned companies. They make investments as part of their income.
Rural area: In this area, basic investment is LI; they have less knowledge about financial
investments. The unawareness about these services is a speed breaker for their investment
plans.
Although they are financial capable for investment but their real state investment is not
treated as an investment by them.
Tribal area: In this area people are not financially capable for investments but they
make some investment according to there strength but these investments are LI and
Savings in a bank or post account only. They also invest in real state but these
investments are in quite low level.
37. THE MAJOR FINDING OF THE RESEARCHARE WRITTEN
BELOW
In urban area the market of financial services in quite good due to availability of
customers with capability to invest.
In urban areas consumer are preferring to made their investment for only profit
and they have high risk taking ability / capacity.
Citizen belief over government companies is quite impressive with compare to
private companies.
In case of semi urban areas the conditions are quite same with urban areas but the
thing is there that relational selling is basically possible, due to the rural effect /
belongingness.
In semi urban area, a small market found for D-MAT and other trade related
service products, due to unawareness and less risk taking ability of citizens.
In semi urban area, consumers are also willing to investing with government
companies.
In rural areas, the people are interested to invest with government companies in
basically insurance products (LI), FD, NSC and bank saving accounts.
In tribal area, people are not too able for financial investments due to their weak
financial condition.
In tribal area, people (who are capable) invest in LIs and saving accounts with
government companies basically.
Another thing is also found that in rural and tribal area people are obtaining loans
for their personal use at higher interest rate from some persons of the same or
semi urban area. The interest rates are too odd like Re3/month for per Re100.
(There is no data is collected for the last finding because this thing come in look
when the study was going on and no change was possible in data sheet.)
39. SUGGESTIONSAND RECOMMENDATIONS
The necessary education of financial products is very important for motivating
financial investments. Basically in semi urban area where people are financially
capable to invest but they are not investing due to unawareness of financial
products.
It is also the duty of government as well private groups to establish proper in
fracture for motivating financial investments.
In some cases, the basic in fracture like power, communication etc. is not
available so market investments are impossible for rural areas.
In case of tribal, they have not enough money to make proper investments; even
they are unable to hire an insurance policy for their safety. So before enforcing to
them for investments it is necessary to provide abdicate earnings to them.
The financial services companies are not focusing toward rural and distinct
market even more than 65% Indian population is living in these areas. And also
other companies are focusing that market.
In Indian stock market a huge amount of money comes form FIIs or FDIs which
enables us uncertainty and an effect of global misbalance although our
international business is not too big with compare to others (approx. less than1%
of total IB). It can be removed by enabling semi- urban and rural investment in
stock market.
A huge market for LIs is available in rural and tribal areas but companies are
focusing on urban areas so they must en -cash the opportunity.
Companies can sell their financial products with some welfare activities and
awareness programs in rural areas.
In semi urban areas the teenagers must be targeted for their awareness programs
because they are the prospective customers of their products.
It is try to involve the educational institutions in awareness program about
financial investments for mass effectiveness because these institutions having
upcoming service users.
41. BIBLIOGRAPHY
Research methodlogy - C.R. Kotari
Marketing Planning For Financial Services – Roy Stephenson
Marketing Research - Bruce Wrenn, Robert E. Stevens & David
Loudon
Social Research Methods - Harvey Russell bernard
Research paper on financial services in INDIA – Ministry of Financial
Affairs GOI
Saving of household sector in financial asset - RBI
Hindustan times and India today.
www.google.co.in
43. Definitions
Urban: In this research project, the metros like Delhi is consider as urban area but
because India is a developing country and many other cities like Bhopal may also
consider as urban area.
Basically urban area is those cities of country where development authorities are
working as national level and the population is also not less then two million. As well the
education level, earning, saving, in fracture and living standers are also higher than
other areas of that particular region. Like when we talk about per capita income it must
be high. There must be a high level of job opportunities available.
Semi-urban: In the context of this particular study, Semi-urban consider as the area
containing not less than the population of one million like districts as Sagar (MP). The in
fracture is not enough develop as compare to metros but due to less population these
seems to more develop as compare with metros. Earning capacity of citizens is
satisfactory. Education level is good.
Rural: In the context of this particular research, Rural is the village area of the nation,
due to huge development activities like establishment of NAREGA, NABARED and
Pradhanmantry Gram Sadak yogna, Villages are developing at a higher level . And we
cannot say there is any inconsistency in development of in fracture. A village contains
not more than ten thousand person. In India our more than 65% population is belong
from rural area (including tribal area). There is not big market place available. And the
major portion of population is involved in agriculture sector. The level is education is
good in general casts but there in some inconsistency in other casts like OBC& other.
Income variations are also very huge in rural area because mainly resources are
controlled by general casts.
Tribal: In this study, tribal considers as the distance area. The residence of such area
may belong from any village but they lives in there separate area. Mainly they are not
considering as inner portion of general society. The education standers are also not
good in such area. Some times they are treated as second class citizen of country.
Generally they are unable to make savings due to less income. Basically they belong
from jungle for their daily needs, they are also landless labour.
Investment: Investment means, Use of some thing like money, material, labour for the
purpose of obtaining profit in term of monetary value.
Investment differs from expenditure.
44. Expenditure: It is concerned with Use of money, material & labour, which has no
return of any thing. For example: purchasing of cloths for personal use.
Savings: Savings are retaining some thing like money from earnings for the purpose of
future use.
Earnings: Earnings are the profits, which come from investments.
For example: a labour invests his hard work to earn money.
NEWS: This is as simple normal news, but here I concerned about those medium form
where a person can access the daily information about new financial investments.
Means is he really interested to know about financial information or not.
Communication: In this study communication in related with the level of interaction.
Means how much they are ready to tell financial information to each other.
Saving Account: In this research, saving account is not treated as an investment
because there is a fixed interest paid on such accounts.
Insurance:
Life Insurance:
45. Commodity Market:
Commodity market deals in commodities, means it controls the flow of good in
markets.
Somehow we assume it as an illegal market due to its feature. Some time it is
responsible for price hick of commodities. For example the current price hick of sugar. In
Islamic Laws such markets are illegal.
Stock Market:
Stock market is also known as capital or equity market. In INDIA, There are two main
stock market BSE& NSE both are situated in Mumbai. BSE is the biggest stock market in
the world in terms of company listed on it. The index of BSE is known as Sensex, which is
also treated as the index of our economy.
47. QUESTIONNAIRE
PERSONAL IN FORMATIONS
Name:
Age:
Sex:
Income:
Qualification:
Occupation:
Residential area:
'CONSUMERS PREFERENCE TOWARD FINANCIAL SERVICES'
1. Do you aware of financial services?
Yes No
From which media did you have the information about financial
services Products?
Print Media Broadcast Media Internet Other
2. Which type of company you prefer for financial investments?
Govt . Company private company both type of companies
3. Would you like to prefer gold investment?
Yes No
4. Do you prefer to invest in real state?
Yes No
5. Are you storing your money in saving account and not investing any where?
Yes No
6. Do you feel any change in your thoughts toward investments in last few years?
Yes No
48. 7. Do you feel, there is any change in perception toward private companies?
YES NO
If yes, than which type of change you feel?
Positive negative
8. Are you investing in stock market?
Yes No
9. Which company’s D mat you prefer for investment?
Government Company Private Company
10. Are you investing in mutual funds?
YES NO
11. Are you investing in govt’s securities and depts?
Yes No
12. In case of banks,whichtype of bankyou prefer?
Govt Private BothG&P Banks
13. Incase of Insurance,whichtype of companyyouprefer?
Govt Private BothG&P Banks
50. SUMMARY OF THE PROJECTREPORT
RESEARCH PROJECT
Title ………………………………. Consumer’s perception toward financial
services
Name of Researcher………………………………….……..Puspendra Singh
Branch…………………………………….MBA (MARKETING) IVth Semester
Name of Guide…………………………………………….Prof. Nitin Bhavsar
OBJECTIVE OF STUDY
To find out consumer’s perception toward financial services from different market
segments.
AREA OF RESEARCH
Locations ……………………………… Bhopal, Rewa, Satna and Panna.
Market segmentation………………….
Urban
Semi – Urban
Rural
Tribal
Financial Services included in Study.......
Insurance
Mutual Funds
Gold
Real State
Savings with banks
NSC
Govt. Depts.
Stock Market
51. SAMPLE SIZE TAKEN FOR STUDY
100 from each consumer segment.
Data is collected from 400.
PROJECT DURATION
Starting Date of Project………………………………………20th May
2010
Project planning and Arrangements …………………………….2 Days
Duration of Data Collection…………………………………....36 Days
Data Interpretation………………………………………………3 Days
Project Finalization …………………………………………....2 Days
Project Review…………………………………………………1 Day
Project documentation………………………………………….1 Day
Completion of Project………………………………………...04th July
2010
52. CONCLUSION OF THE STUDY
On the basis of the study, area of study and finding, we come to some basic
points:
The level of investment is depends upon financial strength, knowledge,
area and risk taking ability of the person.
The society is also an influencer for investments.
If the required knowledge about new financial product is provided to
consumer than he can made further new investments.
In rural and tribal areas the abdicate facility of information processing is
not available.
The core in- fracture for appreciating financial investment is not
developed in many areas including semi-urban.
Believes over government companies are quite high with comparison to
private companies.
Risk taking ability is not too good in any location.
Mostly people are worried about share market investments. They are not
willing to do so due to higher risk.
