November 10 IJM Final

` 100/-
Indian
Journal of
MARKETING
VOLUME : 40 NUMBER : 11 NOVEMBER, 2010
In This Issue
Microsoft’s Windows Vs. Google’s Chrome - Who Sanjeet Kaur

Will Win The Market ? Sumit Kumar Verma
Winning Customers Through Service Innovation - Dr. Vinay Kumar Nagu

CAB WISE
CRM Practices In The Asia Pacific Industry- R. Ruma Agnes

A Conceptual Study
Customer Acquisition And Retention Strategies Dr. V. Murugaiah

In The Service Industry - A Case Study Radhika Vishvas
Impact Of Brand Preference Dimensions On Customer Dr. C. Dharmaraj

Satisfaction - A Meta Analysis For Passenger Cars
A Study On Customers’ Attitude Towards Online Dr. Neelotpaul Banerjee

Shopping - An Indian Perspective Dr. Anindya Dutta
Dr. Tanmoy Dasgupta
A Critical Review Of Gender Differences In Online Prashant D. Amin

Shopping Dr. Bijal Amin
Life Insurance And Working Women : A Critical Study Of Dr. Manish Srivastava
Factors Affecting The Purchase Decision Megha Rastogi
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Indian Journal of Marketing • November, 2010 1

Indian
Journal of
MARKETING
VOLUME : 40 NUMBER : 11 ` 100/- NOVEMBER, 2010
Editor- In- Chief
Mrs. S. Gilani CONTENTS
Managing Editor
Priyanka Gilani Microsoft’s Windows Vs. Google’s Chrome - Who Sanjeet Kaur 3
Will Win The Market ? Sumit Kumar Verma
Editorial Board
Prof. V. Shekhar
M. Com., M.B.A., Ph.D.
Dean, Faculty of Management Winning Customers Through Service Innovation - Dr. Vinay Kumar Nagu 9
Osmania University, Hyderabad
Dr. R. Vijayakumar
CAB WISE
Assistant Professor
Department of Commerce
Government Arts College (Autonomous) CRM Practices In The Asia Pacific Industry- R. Ruma Agnes 14
Coimbatore, Tamil Nadu A Conceptual Study
Dr. D. N. S. Kumar
Associate Director - Research
Christ University 22
Bangalore, Karnataka
Customer Acquisition And Retention Strategies Dr. V. Murugaiah
Dr. Kulbhushan Chandel
In The Service Industry - A Case Study Radhika Vishvas
Reader
Faculty of Commerce and Management
Himachal Pradesh University
Shimla, Himachal Pradesh Impact Of Brand Preference Dimensions On Customer Dr. C. Dharmaraj 28
Dr. Sandip Anand Satisfaction - A Meta Analysis For Passenger Cars
Associate Professor (Marketing)
Xavier Institute of Management (XIM), Bhubaneswar
Mr. P. K. Mittal A Study On Customers’ Attitude Towards Online Dr. Neelotpaul Banerjee 36
Managing Director
eMIT Peripherals Pvt. Ltd. Shopping - An Indian Perspective Dr. Anindya Dutta
Noida, Uttar Pradesh Dr. Tanmoy Dasgupta
Subscription Manager
Meenakshi Gilani
The views expressed by individual contributions in Indian A Critical Review Of Gender Differences In Online Prashant D. Amin 43
Journal of Marketing are not necessarily endorsed by the Shopping Dr. Bijal Amin
Management.
Copyright©2010. All rights reserved. No part of this publication
may by reproduced or transmitted in any form or by any means,
electronic, mechanical ,photocopying, recording,or otherwise, Life Insurance And Working Women : A Critical Study Of Dr. Manish Srivastava 53
without the prior written permission of the publisher.
ISSN 0973-8703 Factors Affecting The Purchase Decision Megha Rastogi
IJM is listed in Cabell's Directory of Publishing Opportunities;in
Ulrich's International Periodicals Directory, USA and is also
available on Amazon.com Indian Journal of Marketing is published monthly and
All disputes are subject to Delhi Jurisdiction only. is available against subscription only.
All correspondence relating to circulation and advertisement Subscription Rates for Individuals/Institutions :
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Email : meenakshi.gilani@indianjournalofmarketing.com International Rates - US $ 125 per year
2 Indian Journal of Marketing • November, 2010
Microsoft's Windows Vs. Google's
Chrome -Who Will Win The Market??
*Sanjeet Kaur
**Sumit Kumar Verma
INTRODUCTION
Google has launched its new Chrome OS (Operating System) in the 2nd half of 2010, this became one of the most
popular news; posted on Google's official blog.
“It's been an exciting nine months since we launched the Google Chrome browser. Already, over 30 million people use
it regularly. We designed Google Chrome for people who live on the web - searching for information, checking email,
catching up on the news, shopping or just staying in touch with friends. Google Chrome OS is an open source,
lightweight operating system that will initially be targeted at net books. Later this year, we will open-source its code,
and net books running Google Chrome OS will be available for consumers in the second half of 2010.”(Source: The
Official Google Blog).
Basically, an Operating System is a bridge between the computer and its user, its takes instructions from users to
perform the task in the computer and then again, meet the user with drawn results or in more generalized form, an OS is
a software which act likes a means of communication between a user and the user's computer hardware. Microsoft's
Windows XP, Windows Vista and Windows 7, Apple's Mac X and the Linux based Ubuntu are the most popular
operating systems presently. Chrome OS would be an open ware (free for consumption and distribution which is a very
common feature of Linux based operating systems- moreover, open wares provide the code on which they have been
made to the users by which they can develop it further or can make changes to make it more functional to them
according to their individual needs) again as Google says- It will initially be targeted at net books -a light version of
laptop uses Intel atom processor for processing RAM 256 to 512MB- that's why ranges in $250 segment focuses only
to the internet access and needs very light version of operating system and could be understood easily if we say that it is
very similar to the main frame computers of 2001. So it left a room for Microsoft and Apple to think again about their
OSs- whether they will be able to compete against the Internet giant because presently available Google softwares are
doing tremendously well such as the Chrome browser (gained 7% of the world internet users from 3.1% in 12 months
from the time it was started), Picasa (photo viewing software just as windows picture and fax viewer) ….. etc. Both are
freeware and can be downloaded from Google's website freely and we can expect more from Google's OS just seeing
the performance of Picasa and Chrome browser. The truth about Window's and Microsoft's other product's much
success is that, very few know about what is Ubnutu and other Linux based OSs, what it costs and from where they can
get it! (Linux makers do not advertise! We can't expect anyone who is distributing his product free and also advertising
for its popularity). In case of Google's Chrome OS, coming from the company that has the world’s most preferred
home page and search engine, it would be very hard to remain in dark about it. The x factor would be its speed as
Google commits because what Microsoft says about Windows is that they are more secure. The researchers personally
feel that Linux is doing better in terms of security- it has no virus malware and has less other reasons for which one can
fear about security. But there are no free lunches at all, think what if Chrome OS will be in all systems worldwide- then
the whole power would be in Google's hand and they will become market leaders. They will be able to do anything
with our data, be able to access our computer any time they want. Yes, it might be able to save you from viruses,
malwares and other security threats because they are targeting firstly internet users, but what if they themselves want to
harm us in a similar kind of situation- when we have given our home keys in the hands of a thief ?
*Lecturer, Institute of Management Studies, Dehradun, Uttarakhand. Email : khuranasanjeet@gmail.com

**Student (Research Scholar),Institute of Management Studies, Dehradun, Uttarakhand.
Email : sumit.mukesh.verma@gmail.com
GOOGLE'S VISION FOR CHROME
“Speed, simplicity and security are the key aspects of Google Chrome OS. We're designing the OS to be fast and
lightweight, to start up and get you onto the web in a few seconds. The user interface is minimal to stay out of your way,
and most of the user experience takes place on the web. And as we did for the Google Chrome browser, we are going
back to the basics and completely redesigning the underlying security architecture of the OS so that users don't have to
deal with viruses, malware and security updates. It should just work.
Google Chrome OS will run on both x86 as well as ARM chips and we are working with multiple OEMs to bring a
number of net books to market next year. The software architecture is simple - Google Chrome running within a new
windowing system on top of Linux kernel .For application developers, the web is the platform. All web-based
applications will automatically work and new applications can be written using your favorite web technologies. And of
course, these apps. will run not only on Google Chrome OS, but on any standards-based browser on Windows, Mac
and Linux, thereby giving developers the largest user base of any platform.” (Source: The Official Google Blog)
WHAT AN OS IS ALL ABOUT AND THE NUMBER OF USERS AFFECTED BY IT

Would only the Netbook users use Chrome OS? We don't think so, because we always want something better. There
would be no harm to try something which is free to use, and we believe that we all will be loyal with Windows at the
cost of our pockets.So we first try to calculate the number of persons for whom we can assume that they know about
Google, we can directly get the number of internet users and number of computers all over the world. We are tracking it
according to INDIA - our motherland.
Table 1: Number Of Internet Users (By CIA According To Oct2009)
Iceland 202,300 (2007)

India 80 million (2007)
Indonesia 13 million (2007)
Number of Internet Users (by International Telecommunication Union Wti_informationtechnologypublic.xls)
India contributes 81,000,000 users to the total world users of 1,605,293,500.
Graph 1: Asia Top 10 Internet Countries

Table 2: World Internet Usage And Population Statistics
WORLD INTERNET USAGE AND POPULATION STATISTICS
Users
Growth
Population Internet Users Internet Users Penetration %
World Regions 2000-
( 2009 Est.) Dec. 31, 2000 Latest Data (% Population) of
2009
Table
Africa 991,002,342 4,514,400 86,217,900 8.7 % 1,809.8 % 4.8 %
Asia 3,808,070,503 114,304,000 764,435,900 20.1 % 568.8 % 42.4 %
Europe 803,850,858 105,096,093 425,773,571 53.0 % 305.1 % 23.6 %

Middle East 202,687,005 3,284,800 58,309,546 28.8 % 1,675.1 % 3.2 %
North America 340,831,831 108,096,800 259,561,000 76.2 % 140.1 % 14.4 %
Latin
586,662,468 18,068,919 186,922,050 31.9 % 934.5 % 10.4 %
America/Caribbean
Oceania / Australia 34,700,201 7,620,480 21,110,490 60.8 % 177.0 % 1.2 %

100.0
WORLD TOTAL 6,767,805,208 360,985,492 1,802,330,457 26.6 % 399.3 %
%
NOTES: (1) Internet Usage and World Population Statistics are for December 31, 2009.
(2) Demographic (Population) numbers are based on data from the US Census Bureau.
(3) Internet usage information comes from data published by Nielsen Online, by the International Telecommunications Union,
By GfK , local Regulators and other reliable sources. (4) For definitions, Disclaimers, and navigation help, please refer
to the Site Surfing Guide .(5) Information in this site may be cited, giving the due credit to www.internetworldstats.com.
Copyright © 2001 - 2010, Miniwatts Marketing Group. All rights reserved worldwide. Source:
http://www.internetworldstats.com/stats.htm
Again internetworldstate.com supports the same figure of 81 million internet users in India.But the country's telecom
regulatory authority makes you meet a different picture of the same.TRAI's Report (trai report
IndicatorReport1oct09.pdf), cannot be wrong because these are not derived by surveys, but are official statistics of a
country. The report shows that India presently has approximately 147.64 million internet connections and the number
of users must be more than that because in this developing country, not everyone can afford a computer, so they do visit
cyber cafés frequently, we cannot have the exact calculation of that. But for these 147.64 million, we can expect that
they know what is Google (most of the internet sites use Google search engine and get result from it and then mix it up
with their own preferred results) and this is the advantage for Google that more population know them than Microsoft
or different versions of windows
So we first start understanding the different Operating Systems, and for convenience of writing, we use the word OS at
the place of Operating System, which is also very popular in between advanced computer users but to develop a
common understanding of OS, we start with a graphical presentation.
OS is a bridge between a user and a computer and in technical language, it gives you the ground to interact with your
computer. For Foundation for an operating system (On which an OS is waived), we are considering only popular ones.
1.Microsoft's windows base
2.Linux
3. UNIX
Main structure or we call it Operating System
1. Microsoft's windows based operating systems (paid biggest in the market) :
Windows XP, Window Vista, windows 7.
2. Linux based (available free or very low priced for use) :Ubunto, Redhat, Mandriva
Linux, Back Track.

3. UNIX : Junix, Mac's operating systems X and further more.
Table 3: Comparative Analysis of Three Operating Systems : Windows, Linux and Mac
Category Windows Linux Mac
There are more than 150,000 . than any other

Linux has better safety This unix avatar is more safer
Security virus malwares present for type of OS available. than windows, but still you find
Windows XP, Vista is safer and more enemies than Linux.
Windows 7 is the safest option.
Safety(what is
The meaning of Many a time, you will find You hardly face any software crash but A Mac user , even an advanced
safety? Here the many softwares being crashed. many times, you might get a slow one, rarely has had
term implies system response. acquaintance with it.
only the amount
of safety it
provided to the
software
installed on your
system.
Software All softwares supports Windows You will find many emulators which 95% paid and unpaid software
Compatibility XP, a few less Vista, again most can run most of your windows based do support Mac but some
of them support Windows 7 software on Linux ground, but the idea Power users can feel their
also because you can run any does not work on all. You can’t run collar tight because it might
software in compatibility mode those ones which require registry disappoint them . Many small
of previous windows version. settings and many other heavy Softwares can only run through
softwares, but most of the commercial Emulator, but they might not
users do not prepare their software for work as expected.
Linux versions.
.
Hardware All hardware support Windows, HP & Compaq do not support Linux, Many meant for Mac books and
Support but all Mac hardware might Dell now officially supports Linux.Many Others may or may not support
not be supportable for these machines support and do not support Mac X leopard.
(Apple makes computer under different versions of Linux OS.
the brand name of Mac ; you
might have seen a commercial
at the time of Vista’s launch.
Drivers All hardware makers give driver Might find many types of drivers but Apple themselves provide all
support for the most popular would not be able to find wireless lan required support for Mac. It
OS in the world. XP and many
Drivers for almost all types of machines. depends whether they are
Vista versions still don’t have
providing it or not.
supportable drivers.
Price Very Nominal. Almost free or costs quite less for Mac OS is very expensive.
some OS.
Appearance XP is ordinary presently;Vista Different OS provide different The current one Mac X (Leopard)
had a better look and Windows facilities. Has the aqua look and looks
7 has a great look. great.
Source : Self testing, Internet polls,reviews and information gained via the internet.

So now, after the beginning of a common understanding, we dissect these three for the selection of best one, and the
facts and figures for these have been tabulated in Table 3.
CATEGORY DISSECTION
]Security : It would be wrong when you say that your product is the safest one, but actually nobody cares to break
your security because 80% users uses Window XP- that's why most of the hackers target only XP and again, about other
versions of Windows, Linux and Mac, they are secure only till the time when they do not have any big market share, it
may also possible that the other OS we are using might have viruses but we cannot get informed. Now hackers do not
make silly viruses which will spread text like 'I love you' or it will create a folder again and again in the folder but they
make them like that these will use very little amount of your internet connection and will continuously send your
password and personal information to strangers, its unbelievable but it is the truth.
]Safety : Again, very few people use Linux and Mac and again, majority in these don't have power users, they might
be only in minority, that means very few users uses every single bit of their computer for which they have paid. We
cannot have any fair idea until rubber meets the road.
]Price : If you are using an OS just for surfing, chatting, sending and receiving emails, then why to pay more for
Windows and Mac- just go for Linux but the real problem is not with the price. But until now, 95% users even don't
know what Linux really is. Most of them even can't install Windows on their own, which they have been using from
past many years.
]Appearance & Graphics : Think you are well prepared with a tie, court or in a jacket with polished shoes and working
in a farm somewhere in deep Africa, similarly, the same is with an OS also, these GUIs (Graphic User Interface ) can
give you best of the advanced look, but do you really require that ?
]Drivers : What about that condition when you can only use your PC or laptop as a paper weight because it cannot play
sounds, doesn't have a wireless connection, but in your office you only have wireless internet connection and what
about the PC which cannot be compared even with a TV also for visuals? We must remember that Linux PC might not
have these drivers. Then instead of a PC, we will rather be having it only as the priciest paperweight, but again,
companies do not feel any major requirement to get Linux versions of drivers because there are very few users
available and it might be very costly for them to manufacture these.
CONCLUSION
According to data available on the Internet, in the year 2008, we were with 1 billion computers and till the year 2015,
the number would cross the 2 billion mark, but the effect of Netbooks might be negative or also, it may be possible
that there would be a separate market for them (likewise IPods- that were a new product in the market few years
back).There might be a different product in coming years or months which again can affect the whole equation very
dramatically.
Steve Ballmer- the CEO of Microsoft says Linux has only a Price advantage over windows you even don't know who is
the manufacturer of it (from where it came) but is this really true? A big question!
Ballmer might be laughing at Google's OS approach but a couple of months before it launched its Bing search engine,
what was the need of it? if they are really not afraid of Google, which is the fastest and most reliable search engine and
the most popular one at that! But what about the drivers? We must understand if the mass market will move to Linux,
then we will be having a good packet of drivers and many viruses, worms, spywares and malwares as well, but there is
no need of panicking, these all can be made only when one has a very good knowledge of an OS and it will take time to
get prepared for this. Just because of its popularity, Google has won half of the battle in India, and Microsoft has to
cover a very long way. If the changes were not acclimated, then it is a possibility that the next generation will read
Microsoft in their history books only.
But the question that still stands- That will Google not draw an illegal or unexpected benefit from the uncontrolled
access that it would have to the systems of its OS users.
BIBLIOGRAPHY
Magazine:-
1)LINUX articles on CHROME OS
2)PCWORLD November 2009 edition page 90-93 (how to deploy windows 7) and 58-59 (functions)
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Winning Customers Through Service
Innovation - CAB WISE
*Dr. Vinay Kumar Nagu
INTRODUCTION
A key issue which has attracted considerable marketing thinking over the last two decades has been the notion of
customer retention. Also, forging long term, cost effective relationships with customers is gaining primacy. The idea of
relationship marketing can be seen as a logical extension of the way in which the forces of marketing have changed
from the 1980s view that marketing was essentially a business function to the idea that marketing should be an
organizational attitude, ethos and culture. One of the most powerful drivers of relationship marketing has been the
recognition of the fact that costs of gaining a new customer is often very high. Understandably, the marketing planner
needs to ensure that the existing customer base is managed as effectively as possible. The traditional path needs to be
shunned. We need to bid goodbye to the philosophy that marketing and selling are a series of transactions and in lieu,
think of marketing as being concerned with the management of long term relationships.The box below encapsulates
the features of traditional marketing, also known as transaction marketing and relationship marketing, the thrust of the
present paper.
Table 1: Transaction Marketing and Relationship Marketing
Transaction Marketing Relationship Marketing
A Focus On Single Sales. A Focus On Customer And Building Customer Loyalty.
An Emphasis On Product Features. An Emphasis Upon Product Benefits That Are Meaningful To The Customer.
Short Timescales. Long Timescales, Recognizing That Short Term Costs May Be
Higher, But So Will Long Term Profits.
Little Emphasis On Customer An Emphasis On High Levels Of Service That Are
Retention. Possibly Tailored To The Individual Customer.
Limited Customer Commitment. High Customer Commitment.
Moderate Customer Contact. High Customer Contact, With Each Contact Being Used To Gain
Information And Build The Relationship.
Quality Is Essentially The Concern Quality Is The Concern Of All, And It Is The Failure To Recognize This That
Of Production And No One Else. Creates Minor Mistakes Which Lead To Major Problems.
Transaction versus relationship marketing (adapted from Christopher et.al., 1991)
From the above, it is apparent that relationship marketing (or relationship management) communicates the idea that a
major goal of a business enterprise is to engage in interactions with customers over the long term. Contemporary
marketers realize that once a sale is effected, the organization must stress managing relationships that will bring about
additional exchanges. Making a sale should not be seen as the end of the marketing process; it is rather the start of the
organization's relationship with the customer which calls for management. The diverse notions about CRM is captured
by Frederick Newell in “Why CRM doesn't work” in the following words. “Some think CRM is a matter of technology.
Some still believe it's just a process of segmenting customers. Some think it's a matter of selling efficiency. Many
marketers still think CRM is just an advanced stage of database marketing using your customer database to find
which customers would be the right ones for a specific product offering. They don't understand that relationship
building must start with an understanding of the customer's needs. They talk about 'share of wallet' but fail to realize
that you can't get access to the customer's wallet if you don't first have access to the customer's heart and mind.” (p 4 -
5).According to Goodhue, Wixom and Watson (2002), CRM is any application or initiative designed to help an
organization optimize interactions with customers, suppliers, or prospects via one or more touch points for the purpose
of acquiring, retaining, or cross-selling customers.
*Assistant Professor, West London College of Business and Management Sciences, London, U.K.Email :vinnysri@gmail.com
An important facet of CRM is 'customer selectivity'. Numerous research studies have conclusively shown that not all
customers are equally profitable for an individual company.(Storbacka 2000) Moreover, in keeping with Pareto's law,
most companies would see that eighty per cent of their sales would be derived from twenty per cent of their customers.
Thus, we aver that while all customers should be treated with respect, all of them need not be treated equally.
Customers want to do business with organizations that know them, that understand what they want and need, and that
continue to fill those wants and needs. CRM is about making sure you have the information you need to do just that. A
review of CRM literature readily makes us behold that among other things, CRM is about growing advocates and
finding new ways to add value to the customer. Amazon.com is a company that has leveraged high tech to engender the
feeling of high touch. Their initiative has served to deepen the relationships with her customers. CRM tools that
support Amazon's customer relationship strategy allow Amazon to: Firstly, add value to customer transactions by
identifying related items with their “customers who bought this book also bought” feature. Secondly, strengthening
relationships by recognizing repeat shoppers and targeting them with gifts and knick knacks.
PERVASIVE CUSTOMER MANAGEMENT APPLICATIONS PROVIDE THREE

IMPORTANT BENEFITS TO ORGANIZATIONS
]Improved Care Through Individual Treatment: As customer interactions with organizations are continuously
tracked, businesses find that they can answer questions before they are asked. In e-Applications that aggregate
communities of users, the community can supply common know how and hands on experience to foster joint problem
solving and customer self-service.
]Reduced Costs Through Customer Self Service: A large number of calls placed to customer service representatives
are to ask a short and predictable list of questions. User profiles allow enterprises to anticipate customer support needs
and prepare answers automatically.
]Increased Repeat Buying Through Long-term Customer Relationships: Significant investments of resources are
called for to ensure the proper functioning of customer management applications. In return, for the substantial
investment of resources, organizations expect to receive customer loyalty. While today, nearly 60 percent of an
organization's business is repeat business, in the days to come, organizations will hope to garner a greater percentage
through repeat business as long term dialogue with customers are expected to take place.
RELATIONSHIP MARKETING MYOPIA

Although customer relationship management has an obvious attraction, Piercy (1999) has identified what he terms
'relationship marketing myopia', or the naïve belief that every customer wants to have a relationship with its suppliers.
Piercy suggests that customers differ in many important ways in the types of relationships they want to have with
different suppliers, and to ignore that reality was an expensive indulgence.
He categorized customers as follows:
]Relationship Seekers : Customers who want a close and long term relationship with suppliers.
]Relationship Exploiters: Customers who will take every free service and offer, but will still move their business
elsewhere when they feel like it.
]Loyal Buyers: Those who will give long term loyalty, but who do not want a close relationship.
]Arm's Length, Transaction Buyers: Those who avoid close relationships and move business based on price,
technical specification or innovation. Thus, there is a need to recognize that relationship strategies have to be based on
the principles of market segmentation and customers' relationship seeking characteristics. To quote Piercy,
“Relationship investment with profitable relationship seekers is good. Relationship investments with exploiters and
transactional customers are a waste. The trick is going to be developing different marketing strategies to match
different customer relationship needs.”
PROACTIVE CRM
Practicing CRM calls for a degree of pro-activeness. Disney Corporation does this brilliantly. At their theme parks,
they have taken note of the things customers do that cause problems. One example is that a tiny percentage of
customers leave their car running in the parking lot, in their excitement to get in to see Mickey. Even though it is a tiny
number of people, Disney knows that they can expect to see this happen. So, their parking lots are patrolled and the
staff-switch of the engine, keep the keys safe and even carry spare fuel so that the customer gets home safely. They
want nothing to spoil their customers' memory of their trip to Disney. Data gathering, data warehousing and data
mining play an important part in CRM. An additional example of proactiveness on the part of business is now
provided. Let us assume that data reveals that a particular customer has the habit of calling his bank every other
Tuesday at 11 a.m. to check his account balance. The bank can use this pattern of communication to communicate back
to the customer. To create a non intrusive interaction with this customer, the bank might call the customer at or around
11 a.m. on Tuesdays to communicate new services or introduce special promotions.
PERILS TO DODGE
A variety of factors preclude the proper implementation of CRM. Patricia Seybold, author of 'Customers.com' and 'The
Customer Revolution' has identified some common pitfalls that prevent organizations from deriving the benefits of
CRM. Since literature on CRM point to the fact that CRM initiatives very often fail, an awareness of the 'mistakes' that
companies make when implementing CRM is instructive. Common pitfalls that endanger CRM initiatives include:
]Designing from the inside out.
]Neglecting the necessary corporate culture changes.
]Focusing on customer acquisition rather than customer retention.
]Starting with sales force automation.
]Neglecting to streamline decision making information that customers need.
]Doing an inadequate job of customer database design.
]Postponing the integration of information and business processes across interaction touch points and operational
applications.
]Avoiding integration of direct and indirect sales and service channels.
MERU: REDEFINING THE 'TAXI' EXPERIENCE

Meru Cabs, operating in four major cities of the country has known and introduced the concept of radio cabs. It has
initiated a slew of strategies and invested considerable sums in brand building.
An great number of passengers who avail taxi services today have Meru at the top of their mind. By making the 'taxi'
experience more comfortable, safe and reliable in India, Meru has been in a position to obtain rich dividends. In a
matter of two years, Meru Cabs has captured the market by storm. However, competition is growing and there is every
need for Meru to protect and enhance its market share. In the paper, we outline some strategies to help Meru keep
competitors at bay. The company started in a small way in 1998, when Neeraj Gupta started off with a small auto
workshop, 'Elite Class' to provide high quality auto maintenance services at affordable prices. The unprecedented
success of 'Elite Class' with corporate clients such as Tata Infotech, Blue Dart and Sony, led Gupta to start a passenger
transport business under the name 'Travel Link' in 2002. Within a year, the sales increased by a factor of eight. In 2004,
Travel Link was rechristened 'V-Link Tours & Travels'. In partnership with private equity firm India Value Fund
Advisors, Meru Cabs metered taxi services was launched. The company received an offer letter from Maharashtra
government to operate the radio taxis in Mumbai. Initially, the service was limited to Mumbai Metropolitan Region
(MMR), but by June 2007, the service started covering the entire city with an increased fleet size. Starting off with
mere 46 cabs, the company was successful in registering about 200 cabs within three months of operations. It is
common knowledge that the company faced stiff opposition from the conventional black and yellow taxis of Mumbai.
The company later made a specific network of business and leisure travelers, thus creating its own brand in the market.
Today, it has redefined transport sector backed with 24X7 call centre and with its trained staff of professional drivers
(called subscribers by Meru). Gupta even received the Udyog Rattan Award from The Institute of Economic Studies
for the high quality of transport services offered by the company.
Presently, Meru operates about 1800 cabs in Mumbai, Hyderabad, Delhi and Bangalore. The company is planning to
first consolidate the current operational markets and then introduce similar services in Kolkata, Chandigarh, Chennai
and Pune. Inch by inch, its sure a cinch is the maxim that the company firmly believes in. The company is not in a
tearing hurry to conquer the entire country by storm.
BUILDING THE 'MERU' BRAND
With about 35 per cent of repeat clientele, the company has been recording a staggering growth of 15 per cent in
business every month. With the Indian economy on a roll and the demand for taxi services forecasted to grow, the
company is aiming to put an additional 4200 cabs in the market in the near term and hopes to be operating about 12,000
cabs by 2011.For building the brand, the company had started various ad campaigns and promotional activities.
THE TAG LINE OF MERU- RELY ON US

]Rely On Us: Sends out a message of safety and hassle-free ride on board. It released a radio ad campaign of a small
boy going all alone in Meru to receive his grandmother from the airport.
]Don't Drink And Drive: Don't drink and drive promotion to encourage people to call for a Meru instead of drinking
and driving. For this promotion, Meru Cabs identified four TGIF (TGI Friday's) pubs and 160 restaurants, where it has
placed tent cards and utilized their LCD screens to spread the message. The tent cards carried the message 'If you find
this hard to read, it's time to book a Meru cab.'
]Coasters: In another interesting innovation, colour coding was used on coasters. A customer was given the first drink
on a black coaster. The subsequent drinks followed on green, amber and red coasters. The red coaster signified that it's
time to call for a cab which comes with the message, 'You do the drinking, we do the driving'.
]Meru's Services Like: 'Dial-a-Meru','SMS-a-Meru' and 'Meru-on-the-Net' have become very popular to customers
and customers can also hail a Meru by the curb-side. All Meru cabs can be tracked from the main control room to
determine their geographical location and ensure a quick response and transmit.
EMERGENCY SYSTEM
Emergency security features such as a panic button are installed in the car along with First-Aid kits in case of any
accidents or emergency situations.
LOST AND FOUND

Meru also has a 'Lost and Found' tracking system in place so that any item left behind unintentionally in a cab can be
traced to the vehicle that the reporting customer has used. Also, it has started a corporate travel programme on a test
mode for business clients. The company is constantly looking at various innovative ways to market the product and
increase its visibility. Currently, there are various ideas being conceptualized by the marketing department of the
company. Hence, we will have to wait and see what will be the next marketing campaign Meru will use to increase the
penetration of the concept of radio taxis in India.
SERVICE INNOVATION AT MERU CABS

]Meru Cabs launches an alternate payment options for passengers to make the experience more convenient.
]Meru Cabs, the first radio cabs company to introduce card payment option in India.
CARD PAYMENT FACILITY AT MERU CABS

Meru Cabs launched their brand new convenient alternative payment facility for their passengers in Bengaluru city
and is also planning to introduce the same in other cities. Meru Cabs has tied up with Axis Bank as its merchant to
facilitate card transactions in its cabs. Visa and Master Cards debit/credit cards will be accepted for fare payment,
thereby making life easier for the Meru passengers. Meru Cabs shall introduce various promotions program to
promote payment by cards. Keeping in mind the concept of plastic money, Meru Cabs has launched this feature so as to
provide a hassle free service to the passengers.
“We got feedback about the preference for payment through a credit card from consumers. Consumers today prefer the
convenience of plastic money over hard cash and often fall short while paying for their fares, making it inconvenient
for them as they have to hunt for the nearest ATM machine. By providing credit/debit card facilities in our cab directly,
we are confident that our passengers will find it more convenient and hassle-free”.
“It is a highly secured application, since the product is almost fully automated. It's inbuilt in the MDT, and the card is
swiped in front of the passenger.Bangalore is the first city in India to get card payment service for radio cabs which
hasn't been implemented in any other city in India, Post Bangalore, Meru Cabs shall introduce service in Hyderabad,
Mumbai, and Delhi”.
“Cities like New York, Boston and Tokyo have the facility of paying by cash or card in the radio cabs. In fact, it is a
mandate in these cities for the radio cabs to have a card payment option for the passengers. Their goal is to replicate
these revolutionary services in India and offer our passengers a truly comfortable & world-class travel experience.”
Meru Cabs has been constantly scaling up its presence in the four cities Mumbai, Delhi, Bangalore and Hyderabad to
meet the ever increasing demand of the passengers. Its presence at the airports of the four cities has helped in adding to
the international class provided by these airports.
To keep up with the changing times, Meru has been upgrading its technology, which even won them the CNBC
Nasscom IT User award for the second year in a row. Recently, the company has implemented an Oracle ERP system,
which has been implemented by Accenture.
SOME OF THE OTHER IMPORTANT ISSUES TO LOOK INTO BY MERU CABS

1)Price per kilometer details should be displayed to customers well in advance so that the customer will know about the
distance and expected time of arrival.
2)First aid kit should be made available in all cabs.
3)The customer should be covered insurance.
4)Frequent user card.
5)Corporate discounts.
6)Leveraging technology.
7)Training/uniform for drivers.
8)Value added services- TV music.
9)Acting promptly on complaints and other feedback.
BIBLIOGRAPHY
1. Adrian Paynee (1996). The Essence of Services Marketing: Prentice Hall of India.
2. Atul Parvatiyar and Jagdish N Sheth (2001). Conceptual Framework of Customer Relationship Management. Customer Relationship Management Emerging
Concepts Tools and Applications, edited by Jagdish N Sheth, Atul Parvatiyar and G Sainesh, Tata McGraw-Hill Publishing Company Limited, New Delhi, 1-25
3.Mohanbir Sawhney (2002). Beyond Relationship Marketing: The Rise of Collaborative Marketing. Defying the limits- Effective Strategies for Unlocking CRM's
Full Potential, Montgomery research Incorporation. 44-46.
4.Philip Kotler (2003). Building Customer Satisfaction, Value and Retention. Marketing Management, Pearson Education Pte. Ltd., 59-87.
5.The Business World Journal.
6.The Business-line news paper, http://economictimes.indiatimes.com/n
7.Valarie A.Zeithaml and Mary Jo Bitner(2003). Customer Perception of Services. Services Marketing- Integrating Customer Focus Across The Firm, Tata
McGraw-Hill Publishing Company Limited, New Delhi, 83-118.

CRM Practices In The Asia-Pacific Insurance
Industry - A Conceptual Study
*R. Ruma Agnes
INTRODUCTION
'Recession' and 'Economic downturn' has been the talk everywhere; companies have wakened up for a more reforming
strategy to beat the heat of the crash. Across the globe, the economic slump has traumatized many companies to the
core, even the traditional and established companies. The market is becoming robust with the economic conditions
making their way up the ladder. Traditional practices of marketing are shifting from 'product-centric marketing' to
'customer-centric marketing'. They have recognized that customers are the core of a business and that a company's
success depends on effectively managing relationships with them. With the changing social trends, such as the
increase in ready-to-cook foods to automatic washing machines, marketing methods have changed. In addition to this,
the lesser Government controls have brought many foreign companies as well as competition in the market. In this
light, CRM is ringing its bell in every organization.
Figure 1: Traditional Marketing Vs CRM Approach
Customers are nowadays empowered to demand more, because of the availability of abundant information through
various sources such the internet, television, newspapers, exhibition and trade fairs, etc. Therefore, he is aware of the
various products available as well as the comparative analysis of their features. Hence, to aptly identify his needs and
to provide the right solution is the greatest challenge of the salesman. In an article, “Do You Want to Keep Your
Customers Forever?” in the Harvard Business Review, Pine, Peppers and Rogers mentioned that “Customers, whether
consumers or businesses, do not want more choices. They want exactly what they want, when, where and how they
want it- and technology now makes it possible for companies to give it to them”.
Despite several approaches towards the concept of CRM, the unifying factor quoted by Peppers and Rogers (1997) is:
Customers have hidden or overt preferences that marketers can reveal by building a learning relationship.
The key to customer relationship is to 'treat different customers differently'. Thus, it is a core business strategy that
provides a platform to create a long-term and profitable relationship with the customers. Organizations which have
realized the positive impact of CRM strategies have taken steps to implement them and are having competitive
advantage in the market. Especially, the Financial Services Markets which has become increasingly global, with many
foreign financial service companies entering into the Indian market. Recent advancements in IT and communications
have made it possible for even the smallest investor to purchase financial instruments from almost anywhere abroad.
The general revival in the economy has resulted in the rising personal income and savings in many areas around the
*Lecturer, Karunya School of Management, Karunya University, Coimbatore ,Tamil Nadu. Email : ruma.agnes@gmail.com
world. The need to protect this wealth, health & oneself, and provide significant opportunities for protecting them
against risk of theft or damage or loss has become crucial. This environment facilitates Insurance companies to seek
premiums and place investments globally. Today, most of the organizations are 'customer-centric'. Insurance is one
such industry that involves many customer touch points/interaction points. It requires a supportive back office enabled
with CRM technology. Insurance is a complex product which needs to be personalized and the Insurance companies,
on an average, manage around hundreds of customers/insurers per day. In order to maintain competitive advantage and
viability, Insurance companies are focusing very carefully on delivering superior customer service. CRM in insurance
begins with a single, complete, real-time enterprise view, so that call center representatives, agents and brokers can
understand and serve every aspect of individual customers, thereby increasing profitability of the company and
increasing the satisfaction of the customers.
CRM - WHAT IT IS ALL ABOUT?

CRM is more than just a technology, it is a strategic process. Today, technology provides businesses with systems that
can help companies track customers' interactions with the firms and allow the firms' employees to quickly retrieve all
information about the customers. This concept is called Customer Relationship Management (CRM).
Greenleaf and Winer (2002) have explained CRM as: Customer Relationship Management (CRM) is a business
strategy to select and manage customers to optimize long-term value. In the words of other experts, CRM means, “It is
a term representing the business strategy built around the concept of improved customer service. CRM practice
involves all aspects of communication and dealing an organization has with its client, whether it is product or service
linked. More clearly, CRM aims at increasing customer satisfaction, consequently increasing a business' income.”
Alternatively, CRM means, “A system that aims at providing better customer service, retaining customers as long-
term profitable customers, selling services/products more effectively, gaining new customers from present customers
through referrals, and providing helping hand to salespeople”.Also, “CRM is a process of building partnerships with
your clients/customers, which involves technology, personal marketing techniques, strategic planning, and internal
business processes from customer service, sales and marketing to build a relationship that adds to revenue margins
and productivity”.Thus in general, CRM allows a company to know who its customer is and what his/her specific
requirements are and to be more precise, CRM solutions collect information about customers and evaluate that
information to profit the organization.
MANAGE RELATIONSHIPS FOR PROFITABILITY

The aim of CRM initiatives is to retain the right customers and a key determinant of customer retention is customer
satisfaction. The objective is to ensure that customers are satisfied to ensure their continued patronage. Almost all
salesperson would be concerned about converting their prospects to a customer and generate more business through
them. This can be accomplished only if the customer is happy with sales experience and also with the product/service,
particularly, the after-sales service. Once a product/service has been mapped in the customer's mind, then the customer
would work on our behalf. Especially in the insurance industry, when the insurer is happy about the money-returns and
services rendered by the insurance company, he will definitely refer his friends and family members.
“Acquiring new customers can cost five times more than satisfying and retaining customers” (Kotler and Keller. 2009.
pg. 138). Nowadays, customers are smarter, well-educated, more informative and have unlimited access to
information than it was in the past. So to identify their actual needs and giving more than their needs is the tough job of
sales people. Once companies have learnt this magic, then customers keep coming back to them for a life time.
Organizations must make sure to gather and respond to customer feedback keeping in mind that the end goal is
changing customer behaviour.
Harvard research shows that an improvement in customer retention by just five percent alone can increase profitability
by 25-100 percent. Loyal customers, encouraged by the relationship building of loyalty-driven companies, increase
their purchasing over time. The tenth purchase of the average online apparel customer is 80 percent larger than his or
her first one. Customer Lifetime Value (CLV) is a way of measuring how much your customers are worth to you over
the length of time that you retain their business. Kotler and Keller (2005) explain the concept of Customer Lifetime
Value (CLV) as: “The present value of the stream of future profits expected over the customer's lifetime purchases”.
“The aim of CRM is to produce high customer equity. Customer equity is the total of the discounted lifetime values of all
of the firm's customers”. CRM will help realizing the lifetime value of customers. Researchers have suggested CLV as
a metric for selecting customers and designing marketing programmes. The researchers have also provided empirical
evidence to prove that relationship exists between marketing actions and CLV at the aggregate level. Thus, satisfying
one customer means more business to us. Hence, to retain customers, companies have to transform from traditional
cultures to customer-centered cultures. A customer-centered company has an external point of view, making plans and
decisions based on the anticipated impact on the customer. These companies are more in tune with their customers,
more aware of how the company is perceived in the marketplace, and are much more likely to deliver consistent,
coordinated, and positive customer experience than other companies.
Figure 2: Customer-Centered Company
According to Chan (2005), to enable a holistic view of customers, all interaction with the customers should be tracked
across various functions like sales and marketing, call centers, customer service, distribution channels and alliance
partners. Interactions across the department should be in a customer-centric manner instead of company-centric
manner. Few suggestions are as follows:
]Product features based on requirement of the customer - collaboration with customers for product innovation.
]Use of technology to fulfill customer transaction on a 24/7 basis - customer convenience should be of utmost
importance in all interactions with customers.
]Ensure updated information on all customer transactions are available to all concerned personnel to ensure proactive
fulfillment of customer requirements.
]Fulfilling the latent desires of customers - aiming at delighting the customer.
DELIVERING CRM
Thus, it is essential to develop and suitably deliver a CRM tool to ensure various benefits for the organization. First, by
developing a closer relationship with customers, organizations may gain a competitive edge. Over time, individual
customers typically educate a company about their individual needs, wants, and preferences-a costly process that they
are reluctant to repeat with a rival. Thus, getting to know customers intimately creates a barrier to imitation of the
leader's strategy. Second, effective CRM can lead to increased customer satisfaction. Properly implemented, the
customer company dialogue facilitates the tailoring of products and services closely to individual needs, and the
development of new products and services to meet changing needs or even anticipate future needs. Third, using CRM
techniques contributes to decreasing overall marketing expenditure as already mentioned above. Therefore, it is
obvious from the suggestions of CRM proponents that CRM leads to higher profitability due to increased sales,
declining customer acquisition costs, and increasing profitability of CRM program customers willing to pay a
premium for “better” service.
Figure 3: CRM Model
Fig 3: is the representation of how CRM will be effective for companies. In the Figure 3, CRM program illustrates on
building relationships with customers and thus establishing customer loyalty. The Data Mining lists the well-accepted
outcomes of data-mining activities. Together, those two sets of outcomes have stimulated many companies to invest in
creating a database-driven CRM system. Many CRM applications, which historically looked only at the customer
interaction area, now include all transactional data and processing along with the very important role of supply chain
and collaborative working.Today's CRM technology with its analytical, collaboration and multi-channel help
complements the traditional operational processes involved in supporting all aspects of customer-facing interactions.
Three segments identified in this framework are: Operational, Analytical and Collaborative.
]Operational CRM: Also known as “front-office” CRM, involves the areas where direct customer contact occurs. It
supports front office processes, for example, the staff in a call center (Vervest and Dunn 2000, Myers 1998, Crego and
Schiffrin 1995; and Greenberg 2001).
]Analytical CRM: Also known as “back-office” CRM or “strategic” CRM, it involves understanding the customer
activities that occurred in the front office. It builds on operational CRM and establishes information on customer
segments, behavior and value using statistical methods (Nykamp 2001, Peppers and Rogers 2001).
]Collaborative CRM: It concentrates on customer interaction using a coordinated mix of interaction channels
(multichannel management) for example, online shops and call centers, (Keen et al. 2000). It makes interactions
between a business, its channel and its customers possible (Reynolds 2002).
In Insurance companies, there is a constant challenge for effectively managing and resolving claims. This includes not
only managing the interactions between the many parties involved in settling the claim, but also defining the process
behind prioritizing and assigning the claim for completion. All too often, customers are asked to repeat the same
information over and over again to several different members of the insurance company who are involved in resolving
the claim. This extends the life of the open claim and helps to foster the familiar perception of insurance companies -
that they are eager to collect premium payments from customers, but are not as eager to assist customers when it comes
to paying out a claim. This can be ruled out only if the different CRM components work collaboratively.
INSURANCE IN THE ASIA PACIFIC REGION

The early twentieth century was exciting times for the insurance industry in Asia Pacific. As governments came up
with relaxing the monopolies and liberalize regulations, the industry was witnessing unprecedented growth driven by
the economic boom and increasing presence of multinational insurance companies in the region. Deregulation in the
sector had created new opportunities in a region that was one of the most underserved in the world. On the other hand,
APAC's insurance industry was facing challenges on a number of fronts. While countries such as India and China
welcome foreign market players, poor market conditions and politically unstable environments had led to the
withdrawal of several insurers from countries such as Taiwan and Indonesia. Another key challenge faced by insurers
was the development of products and distribution channels to meet the requirements of increasingly sophisticated
consumers in more mature markets. As a result, new product areas such as investment-linked insurance plans are
growing, as is the development of bancassurance (bank-sold insurance products) as an important distribution channel.
These factors had caused several companies to review their dependence on agency sales forces and to look at
alternative methods of distribution. The Asia-Pacific insurance market grew by 2.5% in 2002 to reach a value of
$644,436 million in terms of premiums written. The largest proportion of the Asia-Pacific insurance industry was
made up by life and pensions insurance, this category accounts for 66.6% of the industry value in terms of gross written
premiums. Despite being home to a larger proportion of the world's population than either Europe or North America,
the Asia-Pacific region made up just one quarter of the value of the global insurance industry, with a share of 25.5%.
In the same region, life insurance market generated total revenues of $629.2 billion in 2007, representing a compound
annual growth rate (CAGR) of 6.9% for the period spanning 2003-2007. The Asia-Pacific Non-Life Insurance market
generated total revenues of $210.6 billion in 2007, representing a compound annual growth rate (CAGR) of 4.5% for
the period spanning 2003-2007. But 2008 was a difficult trading year for the financial services industry. As a region,
Asia Pacific was not immune to the global economic crisis and local stock markets were significantly affected.
Investor confidence dropped considerably over the year and sales of investment and investment-linked products were
negatively impacted across the region. Despite this, the Asia Pacific region remains highly attractive with markets
ranging from large and mature to emerging powerhouses. The low insurance penetration in most countries, ageing
populations and high GDP growth indicate that prospects for continued growth in the life and pensions industry are
very good. The latest economic forecasts predict GDP growth for the region of 5.8% in 20091.
ESTABLISHED MARKETS (AUSTRALIA, SINGAPORE, HONG KONG)

The Australian market has moved away from older style retail investment products and today, over 90% of retail
investments are being channeled through the wrap administration market. While current market volatility and
declining investor confidence will clearly have an impact on growth in the short term, it is believed that the strong
fundamentals in the Australian market will enable double digit growth in both the protection and platform markets
over the next decade. Singapore and Hong Kong are relatively mature markets and are developing as offshore private
wealth management hubs in Asia. As a result, demand for retirement planning and wealth management products is
increasing.
HIGH POTENTIAL MARKETS (INDIA, CHINA)

India is a highly attractive market with its large population, a high gross domestic savings rate creating capital for
investment, a large and growing middle class to support long-term growth and the government's commitment to
economic reform. China is also a very attractive market due to its population size and stable, rapid GDP growth. The
2
life insurance market grew by an average of 26% per annum between 2000 and 2007 and grew by 48% in 2008 . The
low insurance penetration and changing demographics (a growing affluent class, an ageing population and the
acceleration of urbanization) will continue to fuel growth in the medium term.
NEW START MARKETS (SOUTH KOREA, MALAYSIA, SRI LANKA AND

TAIWAN)
Different insurance companies explored the new market and started joint ventures with bank partners in markets at
various stages of development. Taiwan and South Korea both saw recent penetration of foreign insurance companies,
through joint ventures with leading local banks. These are both advanced markets with insurance penetration similar to
the UK. Malaysia is an emerging market where the government initiatives to make the country an international Islamic
financing hub are expected to translate into a strong increase in Takaful business. The life insurance industry in Sri
3
Lanka grew by an average of 19% per annum between 2003 and 2007 . It has South Asia's fastest ageing population
and the low insurance penetration has the potential to drive continued growth in the future. Despite the global
economic and financial turbulence, Asia remains an attractive growth region. In 2009, while this sector will continue to
grow the business in line with the market and, it will also focus on the efficient use of their capital. Insurance
companies are having a sound business in Asia Pacific with successful, established partnerships and a strong financial
1
Source: Asia Development Bank, December 2008.
2
Insurance Regulatory Commission (CIRC).
3
Insurance Board of Sri Lanka, based on gross written premiums.
position and we remain committed to building a strong presence in this region. In Table 1, the eight major markets of
the Asia Pacific region are given a broad outlook based on survey of Insurance companies focusing on factors such as
similar challenges, including a low interest rate environment, volatility in investment markets, liability risks, and a
significant drop in new business, which will hamper capital resources, and in turn may weaken balance sheet strengths
and financial profiles.
Table 1: Outlooks For Eight Asia Pacific Life Insurance Sectors
Country Industry Outlook

Australia Stable
China Stable
Japan Negative
Hong Kong Negative
New Zealand Stable
Singapore* Negative
Taiwan* Negative
Thailand Negative
*Revised To Negative In October 2008
CRM IN INSURANCE
The insurance industry has been a booming sector and companies are going overboard to get and retain customers.
CRM has proved to be an effective tool in the quest for better customer relationships for the insurance companies. The
aspects where insurance companies have been able to apply CRM concepts include:
A)PERSONALIZATION OF OFFER
In general, Insurance companies have appointed many trained 'insurance advisors' or 'insurance agents' who regularly
establish contact with prospective customers and undertake the job of explaining to them the benefits of the insurance
policies. These 'advisors' or 'agents' draw the profile of the prospect via a friendly conversation and suitably propose a
insurance product to meet their requirements.
B) REGULAR COMMUNICATION WITH CUSTOMER
Insurance products are intangible and customers are often left high and dry to understand the various aspects
concerning the policy that they have bought. Therefore, to ensure that customers are kept in the know, regular
communication is required from both the company to the customer and also the sales agent to the customer. Regular
communication with customer will also help the companies to identify the unmet insurance needs and further cross-
sell or up-sell another insurance product.
C) AGENTS ADOPTING A CUSTOMER-CENTRIC APPROACH
A study that was conducted to study the reason for customer defections and the role of agents to curb them revealed that
65% of the customers who had not spoken to the agent had defected, whereas 80% of the customers who had spoken to
the agent had not defected. Thus, agents need to be provided with suitable platform to constantly keep in touch with
their customers and also process the customer's request at the earliest.
D) SALES FORCE AUTOMATION
This feature or facility will offer more customer-facing time for the salespeople. All routine and preliminary works can
be outsourced to data management centers. The online details or profile of the customer will be accessible by the agent
and the salesperson to obtain the necessary information. Special access to agents can be given to quickly and
efficiently handle customer requirements.
E) UNIFICATION OF DATA-SINGLE CUSTOMER VIEW
Insurance companies are known to operate as silos with hardly any data sharing across the various divisions and
departments. This results in the same customer being targeted by the various divisions and resulting in irritation for the
customer as well as waste of efforts on the part of the insurance company. This can be suitable addressed and avoided
by proper utilization of CRM.

EXAMPLE FROM THE INDIAN MARKET
The Kotak Group has initiated a group wide implementation of Siebel CRM. The solution is expected to go live in the
next six to nine months. "Kotak Life posted a hundred percent growth rate in the last financial year. We also see a huge
business potential as eighty percent of India's population is still not insured. As a result, to cope up with the increasing
scale of operations, we are deploying the CRM solution," says Dhiresh Rustogi, executive VP-IT, Kotak Life
Insurance. As part of the strategy, instead of running multiple applications and then integrating them with the CRM,
Kotak Life decided to go for a system that will not only fulfill the integration needs, but also serve as a single repository
for data. Coupled with this, Siebel will enable Kotak to capture typical data about cold leads, existing, former and
prospective customers, and Sales Force Automation. As a result, the solution offers wide scope for interaction not only
with the existing customer but also with former and prospective customers and agents. As of now, the business
processes are mapped to fit into the individual systems and applications in place. The challenge before Kotak is to
chart a standard set of processes for handling customer, agents, marketing campaigns, however, the sub-processes can
be different in the standard processes. Standardization of processes will be the key benefit after the solution goes live.”
"The customer experience will be standardized across all the group companies. Financial benefits will start rolling out
after we initiate the analysis of all the data captured in the system because we are looking at this product from a long
term perspective," said Rustogi.
While the CRM market in India is still nascent, bigger players such as ICICI Prudential Life Insurance Company are
adopting it in a big way. The company was earlier using GoldMines (a sales and marketing tool) and HEAT (an
operational CRM solution) from FrontRange Solutions. Last year, it took a decision to invest in CM3 from Teradata
and SAS's statistical tool for BI. Anil Tikoo, head-IT at ICICI Prudential Life Insurance Company says, “As a forward
looking company, we see CRM playing a significant role in acquiring new customers. CRM lets us obtain granular
details about our customers, helping us to design better products, improve service levels and reduce operational
costs.” CRM has helped ICICI Prudential Life capture five lakh customers through effective event-based marketing
and lead tracking to cross- and up-sell products.
Tarun Pandey, application manager at Aviva Life Insurance Company India adds, “CRM helps us categorize and
segment customers and align our products that best suit them.” Aviva says that CRM is helping them expand into rural
areas. Aviva caters to close to 100,000 customers with its CRM solution.That's not all. Players such as Birla Sun Life,
Aviva, HDFC Life and MetLife are expected to adopt CRM tools as well in the near term.
CRM - SUCCESS AND FAILURE

Successful customer relationship management focuses on understanding the needs and desires of the customers and is
achieved by placing these needs at the heart of the business by integrating them with the organization's strategy,
people, technology and business processes (Fox & Stead, 2001). A successful customer relationship management
program in financial services addresses four key areas of business: strategy, people, technology and process. The
processes in the organizations are the drivers of change that provide direction to the organization. The strategic
direction moves the two enablers, people and technology through their systematic interaction to a successful customer
relationship management program. Defining the customer's expected life cycle, performance measurement
mechanism and corresponding service mix offering are crucial for success of an Insurance provider. The success or
failure of the system implementation is largely dependent on the cooperation of the employees and the accuracy and
completeness of the initial system analysis. When these are good, under-budget and ahead of schedule
implementations may be experienced, otherwise, a protracted implementation that does not fully match critical factors
and benefits in the implementation of CRM and the needs of the client is likely. Rewarding cooperation may
occasionally be useful, but is generally less effective than creating an understanding and acceptance of project goals.
Kale (2004) writes that the estimates of failed CRM projects range from 60% to 80%. This high percentage of failures
was bound to scare any company wishing to undertake CRM. Kale has undertaken a research and listed the seven
deadly sins with regard to CRM which leads to a failure in implementing CRM. They are:
]Viewing CRM initiative as a technology initiative.
]Lack of customer centric vision.
]Insufficient appreciation of customer lifetime value.
]Inadequate support from top management.
]Underestimating the importance of change management.
]Failing to re-engineer business process.
]Underestimating the difficulties involved in data mining and data integration.
CRM - CHALLENGES AHEAD

With the profound knowledge of strategic customer management, companies would have a better understanding of
handling customers and their requirements. Inspite of these, few challenges have been identified, as listed below.
Table 2: CRM - Challenges Ahead
Types Challenges
Strategic Challenge Managing customers across multiple channels (Neslin et al. 2006).
Achieving customer centricity (Shah et al. 2006).
Managing brand equity versus managing customer equity (Leone et al. 2006).
Models and Metrics Challenge Developing and operationalizing appropriate customer lifetime value (CLV) models
(Gupta et al. 2006).
Understanding the link between CLV and shareholder value (Berger et al. 2006).
Developing forward-looking customer metrics (Zeithaml et al. 2006).
Implementation Challenge Successfully implementing Customer Relationship Management (CRM)
Strategies (Bohling et al. 2006).
Implementing CRM in global environments (Ramaseshan et al. 2006).
CONCLUSION
The increased competition from the local as well as the foreign insurance companies, has just resulted in the increase in
the demand and expectation of the customers. Thus, the concern of customer service and CRM are vital in the
developing environment. This is especially true in the case in developing countries where changes in customer
expectations are linked to increasing educational standards and literacy. Although there has been a significant and
rapid advancement in the area of customer management, there are many issues to be explored. Insurance companies
across the world have also started recognizing the value of superior customer care. However, they are still in the initial
phase of CRM implementation, with some foreign and private sector banks taking the initiative on the technology
front. One of the major challenges in implementing CRM is resistance to change. The success in the implementation of
CRM is achieved only if the company can create the right environment, a culture and attitude of the employees to serve
the customer better. Besides, it also reflects that CRM still requires the adoption by insurance companies of significant
new skills and technology, together with some reorganization of the marketing function.
BIBLIOGRAPHY
1.Abhishek Raval (2007), Kotak Group Initiates Siebel CRM Implementation, BizTech2.com India - A Network18 Venture.
2. Akhtar Pasha (2004), Insurance sector to drive Indian CRM market, Express Computer.
3.Asia-Pacific Insurance (2003, 2004), Datamonitor.
4.Aviva plc (2008), Annual Report and Accounts.
5.Denish Shah, University of Connecticut, Roland T. Rust, University of Maryland, A. Parasuraman, University of Miami, Richard Staelin, Duke University,
George S. Day, University of Pennsylvania (2006), The Path to Customer Centricity, Journal of Service Research, Volume 9, No. 2.
6.Industry Credit Outlook: Asia-Pacific Life Insurance Outlook Revised To Negative As Industry Risks Increase The Pressure (2009), Standard & Poor's Ratings
Direct.
7.Jill Dyche (2009), The CRM Handbook - A Business Guide to Customer Relationship Management, Pearson Education.
8.Judith K. Wincaid (2003), Customer Relationship Management - Getting it Right!. Pearson Education.
9.Kaushik Mukerjee (2007), Customer Relationship Management - A Strategic Approach to Marketing, Prentice Hall of India Private Limited.
10.Kumar V, University of Connecticut. Katherine N. Lemon, Boston College. A. Parasuraman, University of Miami (2006), Managing Customers for Value An
Overview and Research Agenda, Journal of Service Research, Volume 9, No. 2.
11.Ramaseshan. B, Curtin University of Technology, David Bejou, Virginia State University, Subhash C. Jain, University of Connecticut, Charlotte Mason,
University of North Carolina, Joseph Pancras, University of Connecticut (2006), Issues and Perspectives in Global Customer Relationship Management, Journal
of Service Research, Volume 9, No. 2.
12.Tapan K Panda, Creating Customer Life Time Value Through Effective CRM In Financial Services Industry , Journal of Services Research, Volume 2, Number
2 (October '02-March, 2003).

Customer Acquisition And Retention Strategies
In The Service Industry - A Case Study
*Dr. V. Murugaiah
**Radhika Vishvas
“One estimate is that attracting a new customer can cost five times as much as pleasing an existing one. And it
might cost sixteen times as much as to bring new customer to the same level of profitability as the lost customer.
Customer retention is thus more important than customer attraction.”
-Philip Kotler
INTRODUCTION
Sale of any product or service comes from two ways. One is through existing customers (repeat sales) and another is
through new customers (fresh sales). Nothing may seem more obvious than the need to keep customers coming back
(DeSouza Glenn, 1992) as, cultivating loyal customers can lead to increased sales and customer share, lower costs, and
higher prices (Reichheld and Teal 1996; Zeithaml, Berry, and Parasuraman 1996). But here, the challenge is to retain
the existing customers. Practitioners bombard consumers with relationship marketing efforts, value-creating
strategies, and key account programmes (Palmatier W. Robert 2007). Retaining existing customers and acquiring new
customers are two important challenges to the marketers. Retaining existing customers needs a totally different set of
strategies than attracting new customers every time. Now- a- days, it is very difficult to retain customers owing to
reasons like competition in the market place, customer education and awareness about the products and brands,
deficiencies in customer care, ever changing customer preferences for products, accessibility of products in the
market, etc,.Hence, marketers are equally focusing on attracting new customers into their fold, which is relatively
easier one. As a result, sales are mostly through first time purchases also. Now, the question before the marketers is
how to drive customers towards their products. Advertising, Sales promotion, Personal selling are some of the
important strategies being used for this purpose. In some cases, they bring desired sales to the firm. Now, the crux of the
problem with business houses is how to acquire new customers on one hand and on the other, how to retain existing
customers. This problem can be explored with help of analyzing the following: 1) The factors considered by the
customers for buying the products/services. 2) After buying them, what are the attributes/features they look for in the
product/service to draw satisfaction. 3) In case of dissatisfaction, how they experience it and attribute it to the various
factors associated with the same and at times, switch over to another shop/service provider for same product/service.
Against this backdrop, a survey has been conducted in the service sector, with the following specific objectives.
OBJECTIVES OF THE STUDY

1. To ascertain the factors governing the switching behavior of the customers in different service segments.
2. To study the means through which respondents tracked the new service providers.
3. To understand the views of the respondents about the players in the service sector.
4. To suggest the strategies for customer acquisition and retention.
HYPOTHESIS OF THE STUDY

Ho: Impact of selected variables on the switching behavior differs in different service industries.
MATERIALS AND METHODS

]Study Area: Davanagere city- district headquarter of Davanagere from Karnataka State was chosen for the study
purpose. Service sector, in the recent times, is a major contributor for any economy's GDP- either it is a developed one
*Professor and Chairman, Institute of Management Studies, Davangere University, Davangere, Karnataka.
**Assistant Professor - Marketing, IFIM Business School, Bangalore.Email Address: radhika.vishu@gmail.com
or it is not. It otherwise denotes that focus on the economic front shifted to the service sector. It is the case with
customers too. They not only buy tangible products- they buy more and more services. Services, which comprise of
Transport, Health, Education, Beauty parlour, Internet browsing centers, Petrol pumps, etc., play a dominant role in
the daily chores of human life. These services have more dominance, particularly, in urban centers. Hence, there is
more number of service providers in each of these segments. Each service provider would be trying their best to
acquire and retain more and more customers. In the light of the above factors, these four service sectors namely, Beauty
parlours (B.P), Browsing Centers (B.C), Hospitals (H.P) and Petrol Pumps (P.P), as they play a significant role in day
to day activities of human beings in general and urban elites in particular, were chosen for the study.
]Sample Design And Sample Size: Random sample procedure was followed to select sample respondents. From each
of the service sector, looking into the convenience, fifty respondents were selected. Thus, the total number of
respondents from the above four sectors were 200.
]Data Collection Procedure: Data were collected from the above respondents by using interview schedule
specifically designed for the purpose. It was used to elicit factors being considered by respondents to stay with the
existing service providers or hop to new ones. The important variables incorporated in the interview schedule as
identifying factors attributable for switching behavior comprise of 1) Price, 2) Core Quality Service Failure, 3)
Inconvenience, 4) Relations Service Encounter Failure, 5) Ethical problems and 6) Response to Service Failure.
]Analytical Technique: Tabulated data were analyzed with the help of simple percentages to know the extent of
switching behavior of the respondents in different service industries. Based on the literature survey and experts
opinion, variables which are supposed to influence the switching behavior were selected. The extent to which a
particular variable influenced to switch over was worked out for different service industries. In order to evaluate the
degree of association between the impact of selected variable on the switching behavior and the different service
2
industry, the Chi-Square (  ) was employed. The formula used for this purpose is
(Oi - Ei )2
2 =
Ei
Where,
Oi = Observed frequency
Ei = Expected frequency
The value obtained from the above procedure was compared with the table value at (r-1) x (c-1) degrees of freedom.
Here r and c refer to the number of rows and columns respectively. If the calculated value is greater than the table value,
it would be inferred that the impact of the variable on the switching behavior depends on the nature of service industry.
Otherwise, the impact of the variable on the switching behavior and the nature of the service industry are said to be
independent of each other.
RESULTS AND DISCUSSION

From each service segment, fifty respondents were contacted and ascertained how many of them switched over to new
service providers in the last six months’ period and how many had not switched over (Table 1).
Table 1: Distribution Of Respondents By Switching Behavior
Service provider Consumers switched over Consumers not switched over Total consumers surveyed
Beauty Parlors 35(70.0) 15(30.0) 50(100.0)
Browsing Centers 29(58.0) 21(42.0) 50(100.0)
Hospitals 23(46.0) 27(54.0) 50(100.0)
Petrol pumps 31(62.0) 19(38.0) 50(100.0)
Note: Figures in parenthesis are the percentages to Total consumers Surveyed in the respective service sector.
It is found that switching over is quite common in all the four service segments of the study. But switching rate is high
in case of beauty parlours (70%) and low in case of hospitals (46%). This rate is 62% and 58 % in respect of petrol
pumps and browsing centers respectively. It clearly indicates that customers of nursing homes (Hospitals) could not
simply hop from one to another very frequently like the customers of other service segments. Of the respondents, in
each of the service segment, who have shifted their service providers in the recent past expressed the variables, which
strongly influenced them to do so are given in Table 2 and discussed hereunder:
Table 2: Variables That Influenced To Switch Over
Variable Service Industry Influenced Not- Influenced Total Chi-Value
Price
BP 20(57.14) 15(42.86) 35(100.00)
BC 18(62.07) 11(37.93) 29(100.00)
HP 6(26.09) 17(73.91) 23(100.00)
PP 1(3.23) 30(96.77) 31(100.00)
Total 45(38.14) 73(61.86) 118(100.00) 29.829*
Core Quality Service Failure
BP 18(51.43) 17(48.57) 35(100.00)
BC 15(51.72) 14(48.28) 29(100.00)
HP 10(43.48) 13(56.52) 23(100.00)
PP 11(35.48) 20(64.52) 31(100.00)
Total 54(45.76) 64(54.24) 118(100.00) 2.235
Response to service failure
BP 8(22.86) 27(77.14) 35(100.00)
BC 7(24.14) 22(75.86) 29(100.00)
HP 0(0.00) 23(100.00) 23(100.00)
PP 4(12.90) 27(87.10) 31(100.00)
Total 19(16.10) 99(83.90) 118(100.00) 7.217**
Ethical Problem
BP 1(2.86) 34(97.14) 35(100.00)
BC 3(10.34) 26(89.66) 29(100.00)
HP 7(30.43) 16(69.57) 23(100.00)
PP 10(32.26) 21(67.74) 31(100.00)
Total 21(17.80) 97(82.20) 118(100.00) 13.381*
Inconvenience
BP 17(51.43) 17(48.57) 35(100.00)
BC 8(27.59) 21(72.41) 29(100.00)
HP 9(39.13) 14(60.17) 23(100.00)
PP 14(45.16) 17(54.84) 31(100.00)
Total 49(41.53) 69(58.47) 118(100.00) 3.957
Relation service encounter failure
BP 10(28.57) 25(71.43) 35(100.00)
BC 9(31.03) 20(68.97) 29(100.00)
HP 1(4.35) 22(95.65) 23(100.00)
PP 6(19.35) 25(80.65) 31(100.00)
Total 26(22.03) 92(77.97) 118(100.00) 6.555
Note: Figures In Parenthesis Are The Percentages To Total Consumers Switched Over In The Respective Service Sector.
VARIABLES CAUSING SWITCHING AND RESULTING IN DEFECTORS

]Core Quality Service Failure Resulting In 'Service Defectors': What is expected of in any service sector is core
service and that is given utmost importance by the customers. If it is not taken care of by the respective service
providers, they have to face higher customer turnover. It is proved in the study that in all service segments, the strong
reason attributed by the majority of respondents for shifting their service provider is failure of core quality service. It is
51.73% in browsing centers, 51.43 % in beauty parlours, 43.48% in hospitals and 35.48% in petrol pumps. The Chi-
Square test revealed that the influence of Core quality service failure is independent of nature of the service industry.
Thus, irrespective of the nature of the service industry, consumers' hop from one to another service provider, when
there is failure of core quality service.

GRAPH 1 :VARIABLES INFLUENCED TO SWITCH OVER
70
% OF TOTAL SWITCH OVER

60 BP
50
BC
40
30 HP
20
PP
10
0
Price CQSF RSF EP INCON RSEF COMP INVOL
VARIABLES
]Inconvenience Resulting In Service 'Inconvenience Defectors': Between acquiring tangible goods and services,
generally, customers look into factors of convenience more for services than for tangible goods. The study too comes
out with the same analysis. These are the customers who switched to other services as a result of inconvenience caused
to them by these service providers. Inconveniences caused the customers, to a great extent (51.43%) in the category of
beauty parlours, to move over to new service providers. Switching behavior, because of inconvenience, is found
relatively in lesser degree in petrol pumps ( 45.16 per cent), hospitals (39.13 per cent) and browsing centers (27.59 per
cent). The range of switching behavior from one to another service industry is low i.e. 27.59 to 51.43 percent. The Chi-
square results, therefore, also prove that the nature of the service industry and inconvenience variable are not heavily
depending on one another with regard to switching behavior.
]Services Relations Encounter Failure Resulting In 'Relation Defectors’: One of the prominent non-price
competitive factors that rules the roost in present day business is relationship. If the relationship is good, business will
have longevity. This has been emphasized by one of the authorities in marketing management, Philip Kotler, as there is
shift from transactional marketing to relationship marketing. Recent developments in the arena of business provide
more scope for Customer Relationship Management (CRM). Though the concept of CRM is not very popular in the
Indian context like in developed countries, it has made its presence felt. Hence, relations account for around 31.03% in
browsing centers, 29.57 % in beauty parlours, 19.35% in petrol pumps and very low i.e. 4.35% in hospitals, with regard
to hopping decisions of customers. The association between the influences of service relations encounters failure and
nature of service industry proved only at 10 per cent probability level as per Chi-square results.
]Response To Service Failure Resulting In 'Service Failure Defectors': This is the high-tech age; everybody is busy in
his/her own way. If the service provider fails to respond to customers in a desired way, they might feel insulted and
neglected and switch over to another service provider. This tendency is said to be high in busy cities and towns.
However, customers in the study area also feel it. The rate of influence on switching behaviour is as follows: 22.86% in
beauty parlours, 24.14% in browsing centers, 12.90% in petrol pumps and is zero in hospitals. It is inferred through
Chi-square test that there exists a close relation between the influence of response to service failure and the type of
service industry. This is obvious from the study that customers rarely bother to notice service failure, when they are
happy with quality of core service.
]Pricing Failure Resulting In 'Price Defectors': These are the days of non-price competition; accordingly, the
respondents' expressed mixed response as to price is an important variable for their hopping behaviour. In case of
petrol pumps, price per unit being uniform one at all service providers, the respondents opined that price is not at all a
factor to be considered for shifting behaviour. But, at the same time, price per unit of service varies in case of the other
service segments. To this, the respondents in hospital category attach not much importance. Whereas, in case of beauty
parlours and browsing centers, price factor played a dominant role with regard to switching behavior.The degree of
importance that is being shown for price factor in service segments is as 3.23% in petrol pumps, 26.09% in hospitals,
57.14% in beauty parlours and 62.07% in browsing centers. The Chi-Square results endorse the above view by proving
the close degree of association between influence of the price variable on the switching behavior and the nature of the
service industry.
]Ethical Practices Resulting In 'Principled Defectors': Business houses should give priority, besides the above
factors, to ethical practices too. Every business house should have its own ethical code of conduct with respect to the
dealings with customers. If they undermine its importance, there are chances of customers moving away from them. It
is evident in the study. Among the four service segments of the study, customers (32.26%) of petrol pumps are more
prone in this regard. Next to that, it is hospitals (30.43%), browsing centers (10.34%) and very low (2.86%) in beauty
parlours. The test results disclosed that the impact of ethical practices on the switching behaviour depends on the kind
of service industry. Generally, customers don't tolerate unethical practices in petrol pumps and hospitals for obvious
reasons. However, this kind of impact is not that apparent in other service industry.
]Involuntary Switching Resulting In 'Market Defectors': There are chances of either migration of customers or
shifting of service providers from one to another place. In both the cases, customers are forced to hop the service
providers. This also appears to be a reason for switching behaviour in the study area. It is in higher side (11.43%) with
regard to beauty parlours, followed by petrol pumps (9.68%), browsing centers (6.90%) and hospitals (4.35).
]Competition Resulting In 'Hi-tech Defectors': Undoubtedly,business houses are through cutthroat competition.
Satisfied customers of the service provider do not take this into cognizance. It is proved clearly in the study. It has least
impact on switching behaviour. Degree of impact comes to 2.86% in beauty parlours, 3.23% in petrol pumps and nil in
case of browsing centers and hospitals.
FINDINGS
1. Switching Behavior Is Low (46%) With Hospital And High (70%) With Beauty Parlour Respondents: Generally,
patients (respondents in the hospital category) don't wish to change their doctors (nursing homes) very easily and often
as it very delicate thing to do so. Whereas customers of beauty parlours don't have such sensitivity in going for new
service providers. Next to beauty parlours the rate hopping is high in case of petrol pumps (62%) and browsing centers
(58%) respondents respectively.
2. Core Quality Service Impacts Between 38.48 And 51.47 Per Cent In Switching Behaviour: Its impact in browsing
centers is 51.73%, 51.43 % in beauty parlours, 43.48% in hospitals and 35.48% in petrol pumps.
3. Browsing Centers Lose Customers To Their Counter Parts Very Heavily On Price Front: Though price factor has no
role to play in losing/getting customers at petrol pumps, it has much to do in case of browsing centers (62.07%).
4. Word Of Mouth (WOM) Is The Major Influential Source For Switchover : Even though many studies suggest that
informal referrals from others account for three times as many purchases as advertising (cf. Morin 1983), is twice as
effective as radio advertising, four times more effective than personal selling, and seven times as effective as
newspapers and magazines (Katz and Lazarsfeld 1955), retailers and service providers seems to pay less attention
towards this factor. The study revels that positive WOM plays a dominant role in attracting new customers, in case of
hospitals, it works out to be 83% followed by beauty parlours (74%) and browsing centers (59%) but petrol pumps
(35%) are least affected by it.
Active search helps the people to locate best service providers next only to word of mouth. Though companies
knowingly spend huge outlays on advertising, perhaps its not the driving engine in service industry in the study area.
Table No. 3: Sources Influenced To Switch Over To The New Service Providers
SERVICE PROVIDER TCS WOM ADVT. ACTIVE SEARCH ACCIDENTLY OTHERS

35 26 6 4 3 1
BP
(100) (74.29) (17.14) (11.43) (8.57) (2.86)
29 17 4 9 9 4
BC
(100) (58.62) (13.79) (31.03) (31.03) (13.79)
23 19 2 6 1 4
HP
(100) (82.61) (8.70) (26.09) (4.35) (17.39)
31 11 2 10 11 2
PP
(100) (35.48) (6.45) (32.26) (35.48) (6.45)
Source: Field data

GRAPH-2: SOURCES INFLUENCED TO SWITCHED OVER
90
80
DEGREE OF INFLUENCE
70
60
50
BP
40
30 BC
20
10 HP
0
PP
WOM ADVT A.SEARCH ACCIDENTAL OTHERS
SOURCES
STRATEGIES FOR ACQUISITION AND RETENTION

The firms seeking to grow their profits and sales have to spend considerable time and resources searching for new
customers. Customers' acquisition requires substantial skills in lead generation, lead qualification, and account
conversion. Unfortunately, most marketing theory and practice concentrate on the art of attracting new customers
rather than on retaining existing ones. The emphasis traditionally has been on making sales rather than building
relationships; on pre-selling and selling rather than caring for the customer afterward. Some companies, however,
have always cared passionately about customer loyalty and retention. The key to customer retention is customer
satisfaction. Many companies are aiming for high satisfaction because customers who are just satisfied still find it easy
to switch when a better offer comes along. Those who are highly satisfied are much less ready to switch. High
satisfaction or delight creates an emotional bond with the brand, not just a rational preference. The result is high
customer loyalty. Xerox's senior management believes that a very satisfied customer is worth 10 times as much to the
company as a satisfied customer. A very satisfied customer is likely to stay with Xerox many more years and buy more
than a satisfied customer will. In overall service industry in the study area, respondents are retained more in hospitals
(54%) followed by browsing centers (48%). It is very low in petrol pumps (38%) and Beauty Parlours (30%). Service
industry in general, should follow the strategy of maintaining quality of the core service for retaining and acquiring the
customers. Convenience matters more in service sector next only to quality of core service. So, the strategy should be
making the services available to the needy at their convenience. It is particularly with regard to Beauty parlours and
petrol pumps. Service providers should consider pricing strategy too. Price is not a very significant variable with
hospitals and petrol pumps. However, it matters a lot in other service sectors of the study. Service relations are equally
important in service industry; particularly, its presence has more value in Browsing centers and Beauty parlours.
Service providers in the area of Hospitals and Petrol pumps should have more ethical practices than in other areas.
CONCLUSION
Studies show that although customers are dissatisfied with one out of every four purchases, less than five percent of
dissatisfied customers will complain. Most customers will buy less or switch suppliers. “Relationship with a customer
doesn't end with the first sale- It actually starts”. This study endorses the above statements.
BIBLIOGRAPHY
1.DeSouza Glenn (1992), “Designing customer retention plan”, The Journal of Business Strategy, March/April 1992, PP: 24-28.
2.Katz, Elihu, and Paul Lazerfield (1955), Personal Influence, Glencoe, IL: Free Press.
3.Lees Gavin, Garland Ron, Wright Malcolm (2007), “Switching banks: Old bank gone but not forgotten” Journal of Financial Services Marketing Vol. 12, 2 146-
156.
(Contd. On Page 35 )

Impact Of Brand Preference Dimensions
On Customer Satisfaction - A Meta Analysis
For Passenger Cars
*Dr. C. Dharmaraj
INTRODUCTION
In India, after independence, industrialization has paved the way for people to possess luxury items such as television,
refrigerators, home appliances, cars, etc. Motor car is one of the commonly used conveyances by the upper and
middle-class people. Before two decades, only a few industrialists and rich people owned cars. There was a time when
one had to wait for weeks, months or even years to buy a car in India. The option of Indian drivers was limited to a few
models. But, after industrialization, the earning capacity of the middle-class people has also increased. Now-a-days,
motor car is not only bought for social status, but as a necessary one. Moreover, today, every middle / upper middle
class people wants to have a car today. A consumer's decision to buy a product or service is the result of interplay of
many internal and external forces or stimuli. The starting point is the manufacturers’ and marketer's stimuli in the form
of product offering through some promotional methods, available of the product or services at a reasonable price and to
satisfy and retain the customers using different marketing strategies. But the environmental stimuli enter the buyer's
mind through cultural, social, personal and psychological factors that play a critical role in purchase decision. Thus,
the choice of the product/brand/service totally depends upon the consideration and influence of many factors. In this
study, the researcher has focused upon the factors to assess the factors contributing to brand preference of passenger
cars and its impact on customer satisfaction.
CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW

Brand preference is an abstract term and it is necessarily formed through more than one component. This study
endeavours to put together the antecedents and components of brand preference and tries to create a comprehensive
framework for the measurement of the brand preference in the Indian automobile context. The American Marketing
Association (1994) defines a brand as a “name, term, sign, symbol or design, or a combination of them intended to
encourage prospective customers to differentiate a producer's product (s) from those of competitors”. The primary
function of the brand is to provide convenience and clarity in decision making, providing a guarantee of performance
and communicating a set of expectations, thereby offering certainty and facilitating the buying process. Keller 2002 in
his study said that the brand is the sum total of all elements of the marketing mix. Brands can also be explained based on
their elements-“…those trademark able devices that serve to identify and differentiate the brand (eg; brand names,
logos, symbols, characters, slogans, jingles and packages)” (Phillips, 1988) .In his study, Phillips has described a
brand that can be described as a “trademark that communicates a promise”. Broadbent and Cooper, 1987 in their study
noted that, if the brand is to be successful, images and symbols must relate to and indeed exploit the needs, values and
lifestyles of consumers in such a way that the meanings involved give added values, and differentiate the brand from
other brands. Park et al., 1996 in their article stated that, symbolic and functional attributes that the market place
associates with the brand. Symbolic attributes are those that satisfy internally generated needs for self-enhancement,
role position, group membership or ego identification, whereas, functional brand attributes solve an externally
generated consumption related problem. Ambler and Styles (1996) describe two different views of defining a brand.
The first is the product plus view, when the brand is seen as an addition to the product, and in this view, a brand is also
called an identifier. The second is the holistic view that communicates the focus on the brand itself that is considered to
be much more than just the product. Rogers, 1995; Mason, 1990 in their study explained how consumers form
preferences for various goods and services using theories of adoption. Ravichandran.K, and Narayanarajan.S (2004)
studied factors determining the brand preference of consumer durables. They concluded that the study with brand
preference of consumer durables is largely influenced by a number of factors such as advertisement, price, quality,
*Assistant Professor (SG), School of Management, Karunya University, Coimbatore, Tamil Nadu.
Email: dharmarajbusiness@gmail.com
performance, availability of spares, and after-sales service. Moreover, these factors play a vital role in the decision-
making process and in the brand preference. Kotta Thomas. L (1992) in his study examines the influence of extrinsic
cause viz. price, reputation of the product and advertising that has been investigated in a main experimental setting
using multi-item measures. The results indicate that all the three signals affect consumer's quality perception and they
have an indirect influence on purchase intent. Tickwell, Paul A, M Horgan, Dianne D and Keeny Charles Text (1993)
investigated the implications of loyal and non-loyal brands and in this study they found that significant differences
exist between loyal and non-loyal brands and also a high correlation exists between self image and product user rating.
Dorsch et al., 2000 studied Consumer choice behaviour using the five-step process (need-information search-
evaluation of alternatives- purchase-post-purchase evaluation) problem solving paradigm or through the progression
of consumer choice from a product class to brand choice. Abdul Haneef. M, Abdul Karim.B. A and Edwin Gnanadhas.
M (2006) in their study noted that consumer behaviour is influenced strongly by cultural, social, personal and
psychological factors. Cultural factors include the set of basic values, perceptions, wants and behaviour learned by a
member of society from the family and other important institutions. The social factors include consumer's family,
small group, social roles and status. The personal characteristics such as buyer's age, lifecycle stage, occupation,
economic situation and lifestyle influence a buyer's decision. A person's buying choices are further influenced by four
major psychological factors: Motivation, Perception, Learning, Beliefs and Attitudes. Wee (2003) conducted a study
to identify the factors affecting adoption of new product innovations in the consumer electronic industry of Singapore
using qualitative and quantitative research techniques, the researcher considered two brands and using factor analysis,
seven factors were identified as critical in effecting adoption of a player: relative advantage, perceived risk,
complexity, compatibility, observability, image and trialability. Smita Sharma (2006) in her study pointed out the
importance of celebrity endorsement in advertisement and concluded that advertisers use endorsers to add excitement
and glamour to their brands. Basically, celebrity endorsements give a brand a touch of glamour in the minds of people,
and the hope that a famous face will provide added appeal and name recognition in a crowded market. Suresh. A.M and
Raja. K.G (2006) made an attempt to measure the customer satisfaction with small cars. In this study, the customer
satisfaction is measured by using the following variable attributes under different dimensions, namely, after sales
service, ability to understand customer needs, behaviour and knowledge of the mechanics, warranty, prompt delivery,
24 hours customer care, information about the cars, horse power, engine capacity, power steering, technology, fuel
capacity, acceleration, easy finance, convenience and accessibility, ground clearance, easy processing and
documentation, price, discount and rebates, fuel efficiency, maintenance cost, luggage capacity, safety measures,
model and colour of the car, music accessories, engine pickup, availability of spares, cost of labour and spares.
Karjaluoto et al. (2005) investigated the consumer choice in the context of the mobile phone industry in Finland and
the study was conducted to assess consumer motivations in mobile phone choice. Seven estimated factors influencing
mobile phone choice were: Innovative services, multimedia, design, brand and basic properties, outside influence,
price. Doyle, 2002 in his study pointed out the important product decisions in any marketing context are product,
variety, product performance, product features, product design, product presentation, sizes, etc. Kotler, 2003 in his
study stated that consumer surveys often reveal that quality is one of the important, if not the most important decision
factors for consumers and product quality stands for the ability of a product to perform its functions.
STATEMENT OF THE PROBLEM

Consumer choice process is a complex phenomenon. Making a decision to buy a product or services involves many
processes. The literature on brand preference studies reveals that for the selection of durable products, especially
passenger cars, the customer has to spend much time to evaluate and choose the desired one based on their need and
economic condition. The marketing strategies followed by the manufacturer and marketer as well as pre-conceived
idea of the buyer also play a vital role in selection of a particular brand and to get more satisfied. Only a limited number
of attempts have been made to study the impact of brand preference factors on customer satisfaction. Based on these
basic questions, the researcher has developed an interest to study the factors contributing brand preference of
passenger cars and its impact on customer satisfaction level.

1. To study the factors affecting brand preference of passenger cars.
2. To analyze the impact of brand preference factors on customer satisfaction.
METHODOLOGY
This study, endeavouring to test the brand preference model, is exploratory in nature. The data for the study, primary in
nature, has been collected using questionnaires from 712 customers of car owners in the area of Coimbatore city,
during the period from April, 2005 to April, 2008 in the State of Tamil Nadu, India.
TOOL USED
1. Friedman's test. 2. Multiple Regression Analysis
ANALYSES AND DISCUSSIONS

A. FRIEDMAN'S TEST
The Friedman test statistic is mainly used for ranking the variables. The Friedman test ranks the scores in each row of
the data file independently of every other row. The factors that will influence the respondents towards the brand
preference were classified into four dimensions namely, “Information Factors, Psychological Factors, Economic
Factors and Product Factors”. The variables used under the above said four dimensions are developed with the help of
literature review and classified using factor analyses. In this study, Friedman test is used to identify the factor which
has a greater influencing effect on the respondent towards brand preference and the same are given below.
INFLUENCING FACTORS TOWARDS BRAND PREFERENCE-

INFORMATION FACTORS
To identify the information factors which are more influencing the respondents towards brand preference, the
Friedman's test is used and result of the test is given in Table 1.
Table 1: Descriptive Statistics - Information Factors
Information Factors Mean SD Mean Rank Chi-square Df P
Advertisement 2.71 .770 6.57
Dealer's Schemes 2.51 .806 5.83
Salesmanship 2.45 .854 5.71
Internet 2.37 .917 5.56
Friends 2.66 .790 6.43
Relatives 2.57 .829 6.12 251.77 9 0.00**
Coworkers 2.50 .830 5.85
Neighbours 2.44 .892 5.68
Decision Influenced By Spouse 2.52 .857 5.98
Past Experience 2.49 .895 5.85
** Highly Significant (at 1% Level)
The Friedman chi-square tests the null hypothesis that the ranks of the variables do not differ from their expected value.
For a constant sample size, the higher the value of this chi-square statistic, the larger the difference between each
variables rank sum and its expected value. For these rankings, the chi-square value is 251.77; Degrees of freedom are
equal to the number of variables minus 1. The asymptotic significance is the approximate probability of obtaining a
chi-square statistic as extreme as 251.77 with nine degrees of freedom in repeated samples if the rankings of each
factors are not truly different. Because a chi-square of 251.77 with 9 degrees of freedom is unlikely to have arisen by
chance, it has to be concluded that the 712 respondents do not have equal preference for all factors.
It could be noted from the above Table 1 that among the ten factors, Advertisement (6.57) was ranked first. It is
followed by Friends (6.43), Relatives (6.12), Decisions influenced by spouse (5.98), Past experience (5.85) and Dealer
schemes (5.83) which were ranked second, third, fourth, fifth and sixth respectively.
Hence, it is concluded that among the 10 factors, Advertisement, Friends, Relatives and Decisions influenced by
spouse influences are more in consumer's car preference.
INFLUENCING FACTORS TOWARDS BRAND PREFERENCE-

PSYCHOLOGICAL FACTORS
In order to identify the psychological factors which are influencing more the respondents towards brand preference,
the Friedman's test is used and results of the test is given in Table 2.
Table 2: Descriptive Statistics - Psychological Factors
Psychological Factors Mean Sd Mean Rank Chi-square Df P
Social Status 2.65 .786 6.47
Celebrity Endorsements 2.35 .924 5.46
Image Of The Manufacturer 2.66 .806 6.55
Brand Superiority 2.81 .717 7.09
Brand Loyalty 2.77 .764 6.99
Brand Name 2.85 .726 7.28
Personal Values 2.64 .779 6.36 639.80 12 0.00**
Necessity 2.66 .788 5.42
After Sales Service 2.63 .745 6.33
Status Symbol 2.63 .754 6.29
Driving Comfort 2.74 .743 6.81
Style And Colour 2.72 .773 6.77
Logo / Symbol 2.41 .894 5.60
It is clear from the above Table 2 that among the thirteen factors, Brand name (7.28) was ranked first. It is followed by
Brand superiority (7.09), Brand loyalty (6.99), Driving comfort (6.81) and Image of the manufacturer (6.55) which
were ranked second, third, fourth, and fifth respectively.
Thus, it can be concluded that among the 13 factors, Brand name, Brand superiority, and Brand loyalty play a major
role in influencing consumers' car preference.
INFLUENCING FACTORS TOWARDS BRAND PREFERENCE - ECONOMIC

FACTORS
To identify the economic factors which are influencing the respondents towards brand preference, the Friedman's test
is used and results of the test is given in the Table 3.
Table 3: Descriptive Statistics - Economic Factors
Economic Factors Mean Sd Mean Rank Chi-square Df P
Price 2.67 .798 4.60
Disposable Income 2.57 .800 4.26
Easy Finance 2.60 .787 4.37
Discount Offers 2.61 .828 4.42 112.93 7 0.00*
Maintenance Cost 2.66 .822 4.61
Free Insurance 2.64 .797 4.50
Resale Value 2.60 .824 4.41
Mileage 2.76 .770 4.84
It could be noted from the above Table 3 that among the eight factors, Mileage (4.84) was ranked first. It is followed by
Maintenance cost (4.61), Price (4.60), Free insurance (4.50), Discount offers (4.42) and Resale value (4.41) which
were ranked second, third, fourth, fifth and sixth respectively.
Therefore, it can be concluded that Mileage, Maintenance cost and Price play a major role in influencing a consumer's
car preference.
INFLUENCING FACTORS TOWARDS BRAND PREFERENCE - PRODUCT

FACTORS
To find the product factors which are influencing more the respondent towards brand preference, the Friedman's test is
used and result of the test is given in the following Table 4.
Table 4: Descriptive Statistics - Product Factors
Product Factors Mean Sd Mean Rank Chi-square Df P
Quality 2.81 .761 11.79
Comfort 2.77 .724 11.41
Appearance 2.66 .786 10.65
Seating Capacity 2.69 .717 10.85
Technology 2.75 .698 11.14
Durability 2.70 .751 10.86 780.36 19 0.00**
Availability 2.66 .757 10.62
Warranty Terms 2.67 .760 10.75
Road Grip 2.68 .765 10.76
Horsepower 2.69 .733 10.80
Engine Capacity 2.68 .772 10.78
Luggage Capacity 2.56 .835 10.00
Accessories 2.60 .800 10.20
Parking Convenience 2.55 .840 10.08
Safety Features 2.61 .846 10.49
Gift Packages 2.24 .950 8.31
Luxury 2.54 .878 9.98
Recent Euro Norms 2.42 .889 9.27
Space 2.60 .829 10.26
Brake, Power Steering 2.70 .775 10.98
It is noticed from the above Table 4 that among the twenty factors, Quality (11.79) was ranked first. It is followed by
Comfort (11.41), Technology (11.14), Brakes, Power Steering (10.98), Durability (10.86) and Seating capacity
(10.85) which were ranked second, third, fourth, fifth and sixth respectively.
It can be concluded that among the 20 factors, Quality, Comfort, Technology, Brakes, Power Steering and Durability
play major roles in influencing consumer's car preference.
B. MULTIPLE REGRESSION ANALYSIS

Multiple regression analysis was deployed to ascertain the impact of brand preference dimensions over the level of
satisfaction on performance of the car. Linear regression is used to model the value of a dependent scale variable based
on its linear relationship to one or more predictors. Linear regression estimates the coefficients of the linear equation,
involving one or more independent variables that best predict the value of the dependent variable. A correlation matrix
is also displayed.The linear regression model assumes that there is a linear, or "straight line" relationship between the
dependent variable and each predictor. This relationship is described in the following formula.
yi = b0 +b1xi1+....+bpxip+ei
Where
th
yi = is the value of the i case of the dependent scale variable.
p is the number of predictors
th
bj is the value of the j coefficient , j = 0,...,p
xij is the value of the ith case of the jth predictor
th
ei is the error in the observed value for the i case
The model is linear because increasing the level of influence of the jth predictor increases the level of satisfaction of the
dependent by bj. In this section, multiple regression analysis is used to explain the variation in the level of satisfaction
(dependent variable) based on the variation over the variables (independent variable) Information factors,
Psychological factors, Economic factors and Product factors.
Therefore, the multiple regression equation becomes
Y = b0 + b1X1 + b2X2 + b3X3 + b4X4
Dependent variable Y = satisfaction on performance.
Independent variables are X1 = Information factors.
X2 = Psychological factors.
X3= Economic factors.
X4 = Product factors
First descriptive statistics of the variables are considered. The average satisfaction on performance found from Table 5
is 38.66152. The Table also shows the average level of influence of the Information factor is 27.88483, the average
level of influence of the Psychological factors is 31.86236, the average level of influence of the Economic factors is
21.11657 and the average level of influence of the Product factors is 52.60253. The Table 5 also reports the strength of
the relationship between the various factors and the dependent variable. R, the multiple correlation coefficients, is the
linear correlation between the observed and predicted values of the dependent variable. Its large value (0.86) indicates
a strong relationship between the various factors and the dependent variable. The squared value of the multiple
correlation (0.74) shows that about seventy-four percent of the variation in satisfaction on performance is explained by
the model.
Table 5: Regression Descriptive Statistics
Factors Mean Std. Deviation R R Square
Satisfaction On Performance 38.66152 4.720221
Information Factor 27.88483 7.208426
Psychological Factor 31.86236 7.536924 0.86 0.74*
Economic Factor 21.11657 5.437967
Product Factor 52.60253 12.56581
* Significant
The ANOVA Table 6 reports a significant F statistic, indicating that using the model is better than guessing the mean.
As a whole, the regression does a good job of modeling satisfaction on performance. The ANOVA Table tests the
acceptability of the model from a statistical perspective. The regression row displays information about the variation
accounted for the model. The residual row displays information about the variation that is not accounted for the model.
The regression sum of square is lesser than residual sums of squares, which indicates that nearly seventy four percent
of the variation in satisfaction on performance is explained by the model.
Table 6: Anova- Significant F Statistic
Sum of Squares Df Mean Square F P
Regression 675.9964 4 168.9991 7.8786. 000**
Residual 15165.43 707 21.45039
Total 15841.43 711
** Highly Significant (at 1% level)
]Predictors: (Constant), Information Factors, Psychological Factors, Economic Factors And Product Factors.
]Dependent Variable: Satisfaction On Performance.
The significance value of the F statistic is less than 0.01, which means that the variation explained by the model is not
due to chance. Even though the model fit looks positive, the first section of the coefficients (Table 7) shows that there is
predictor in the model which is non-significant coefficients, indicating that the Information factors and Psychological
factors which do not contribute much to the model.
Table 7: Regression Coefficients
Factors B Std. Error T P
(Constant) 38.73736 0.764161 50.69265 0.000**
Information Factor 0.023491 0.066026 0.355786 0.722107
Psychological Factor -0.09703 0.071823 -1.351 0.177127
Economic Factor -0.35305 0.077541 -4.55311 0.000**
Product Factor 0.186608 0.044061 4.235254 0.000**
Dependent Variable: Satisfaction On Performance
The above Table 7 shows the coefficients of the regression line. It states that the expected level of satisfaction on
performance is equal to,
Y = 38, 73736 + 0.023491X1- 0.09703X2 - 0.35305X3 +0.186608X4.
Looking at the significance values from the Table 7, it can be seen that B coefficient of Information factors and
Psychological factors are not influencing significantly the level of satisfaction, because the 'p' value for Information
factors and Psychological factors are greater than 0.05. On the other hand, Economic factors and Product factors are
influencing significantly the level of satisfaction because the 'p' value for Economic factors and Product factors are less
than 0.05.
IMPLICATIONS OF THE STUDY

This study refined the factors that will influence the brand preference of passenger cars in India and revealed the
impact of brand preference dimensions on customer satisfaction. A few paramount implications of the study are
outlined here.
1. Findings of this study indicate that the study is more informative and useful for general public as even the
manufacturers and dealers can understand the dimensions reflecting brand preference of passenger cars and impact of
all these factors on customer satisfaction.
2. Findings of this study also indicate that it is worthwhile for the car buyer to take note of the results of this study
before going for actual purchase.
3. Moreover, the academic researchers in a developing economy like India can gain further, by using the inventory in
this study in their durable sectors study.
CONCLUSION
The present study made a systematic effort on studying consumer brand preference towards passenger cars in India by
analyzing the factors that influence brand choice of the customers and revealed the impact of brand preference
dimensions on customer satisfaction. It is indeed obvious from the study that the performance factors of the passenger
car brands have dominated the preference of customers, based on their economic status. The marketing
communication unleashed by manufacturers and dealers also had a fair say on the total decision of the customer
preference. Overall, it is the all round ability of the car brands, viz, reliability, safety, technology, value for money, high
resale value, high mileage, maintenance cost, quality, comforts, durability, etc., that prove to be decisive factors of
choice right across the globe as well as in India. Moreover, among the four dimensions, Information factors and
Psychological factors are not influencing significantly the level of satisfaction of the respondents than the Economic
factors and Product factors.

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A Study On Customers' Attitude Towards
Online Shopping - An Indian Perspective
*Dr. Neelotpaul Banerjee
** Dr. Anindya Dutta
***Dr. Tanmoy Dasgupta
INTRODUCTION
To survive in the midst of intense competition, most of the companies are looking for unconventional ways of
marketing. Internet is perhaps the best unconventional form of marketing that has been embraced by the companies. As
the internet has been expanding, it has become a popular marketing channel (Cho and Park, 2001). Internet is an
“anytime anywhere' medium (Ramaswamy & Namakumari, 2002) that has given birth to entirely new business
models and opened completely novel opportunities for global marketing. Recognition of the operational efficiency
and effectiveness of the internet is increasingly driving managers in traditional companies to conduct transactions on
the internet (Chakraborty et al., 2002). Many companies have adopted internet for conducting business transactions
and sharing business information with their customers and business partners (Torre and Moxon, 2001). Ghose (1998)
predicted rightly that the internet is fast becoming an important channel for commerce in a range of businesses. The
internet offers direct links with customers and suppliers, and facilitates transactions, processes and information
transfer (Walters and Lancaster, 1999). It offers organizations inexpensive and sophisticated tools for advertising,
taking and placing orders, promoting their philosophies, and communicating with their customers all over the world
(Palumbo and Herbig, 1998). The internet provides a marketplace where buyers and sellers conduct transactions
directly, interactively, and in real time beyond the physical limitations of traditional brick and mortar retailers
(Brynjolfsson and Smith, 2000; Butler and Peppard, 1998; Griffith and Krampf, 1998; Peterson et al, 1997). Today,
almost all business firms use the internet to provide information about the firm, their products or services on the
offering, and advertise and sell their products or services. The internet offers a high degree of interaction and affords
customers unprecedented benefits, from convenience to bargain prices. The ever increasing mainstream activity on the
internet has opened up a whole new value of gaining customers. Thousands of companies, particularly retailers, were
drawn onto the internet by a fear that they would be left behind by online only competitors (Welling and White, 2006).
Thus, what started as a separate form of innovative retailing in the exclusive domain of new entrepreneurs has become
part of a multichannel strategy for established retailers (Grewal et al., 2002). Studying attitudes is helpful in
understanding the potential relationship between attitudes and behaviour. Attitudes that individuals consider
important tend to show a strong relationship to behaviour (Robbins, Judge, and Sanghi, 2009). Marketers should be
interested in their customers' attitudes because attitudes provide warnings of potential dissatisfaction among
customers. Satisfied customers will become loyal to the company. Given the fact that marketers want to keep
dissatisfaction down, especially among loyal customers, they will want to do things that result in positive attitudes
among customers. This is more important for e-marketers as the customers are skeptical due to the element of high
perceived risk and uncertainty associated in an online environment. Technological developments have transformed
the internet into a mainstream business medium, while at the same time, online customers are maturing and virtual
marketers realize the importance for a professional and customer oriented approach (Constantinides, 2004). As access
to the internet is increasing worldwide, customers' purchasing behaviours are changing drastically. India had an
estimated 45.3 million active internet users as in 2008 according to results of a study conducted by Internet and Mobile
Association of India (IAMAI). In India, internet penetration is becoming more widespread because of a number of
reasons. The primary reasons are bandwidth becoming readily available, low internet tariffs, and cheaper computer
hardware. The growing usage of the most interactive medium, the internet, among Indians provides an opportunity for
*Assistant Professor, Department of Management Studies, National Institute of Technology, Durgapur, West Bengal.
Email : neelotpaul@gmail.com
**Assistant Professor, Amity Global Business School, Kolkata.
***Reader, Centre for Management Studies, The University of Burdwan, Burdwan, West Bengal.
undertaking a fundamental research to understand the attitude of Indian customers towards online shopping. E-
marketers in India can develop their online marketing strategies if they know what drives the customers toward online
shopping.
LITERATURE REVIEW
Customers' attitudes towards online shopping have attracted a lot of attention from researchers across the globe.
Previous literature has provided us with a very strong platform with a plethora of e-shopping patronage from varied
perspectives. Swaminathan et al (1999) studied internet users' attitudes towards online shopping. The study revealed
vendor characteristics, perceived security of shopping transactions on the internet, and customer privacy concerns are
the three characteristics of the shopping environment that influences customers' attitudes toward online shopping. A
study undertaken by Modahl (2000) revealed that customers may perceive different types of risks in online purchasing
of goods, as a result of which they may not indulge in online shopping. Hoffman et al (1999) revealed that if consumers
concern for the safety of personal information is taken care of by the e-marketers, then it has a positive effect on the
number of online purchases customers make. Vellido et al (2000), from their study, found risk perception of customers
was demonstrated to be the main discriminator between those who reported that they purchased products online and
those who reported that they did not. Shergill and Chen (2005) found from their study that different types of online
buyers have different evaluations of website design, and website reliability, but similar evaluations of website
security/privacy issues, which indicates that online security/privacy issues are extremely important to almost all
online buyers. Ranganatham and Ganapathy (2002) concluded that security and privacy dimensions of websites have a
greater impact on the purchase intent of online buyers than information content and design of web sites. Gaertner and
Smith (2001) concluded that security concerns have been the most important reason for internet users not shopping
online. A study by Ratnasingham (1998) has revealed that the fear of online credit card fraud has been one of the major
reasons for customers avoiding online shopping. Benedict et al (2004) found from their study that the need to touch,
feel, smell, or ability to try a product influences customers' decision whether or not to shop online. Miyazaki and
Fernandez (2001) opined that one of the main reasons for which customers hesitate to shop online is that online
shoppers are unable to touch, feel, or see real products in order to evaluate the quality. Studies undertaken by Jones and
Vijayasarathy (1998), and by Tan (1998), revealed that the absence of touch and feel in the online purchase process and
concerns about the chances of receiving defective or unspecified goods increases the perceived risk in the minds of the
customers. Research studies conducted by Churchill and Supernant (1982), Oliver (1980), Luarn and Lin (2003) have
revealed that the ability of online companies to convert potential consumers into real depends largely on the service
they offer and on the perceived satisfaction of consumers. Jayawardhena and Foley (2000) identified that convenience,
site design, and financial security are the dominant factors in customer assessment of e-satisfaction. According to
Collier and Bienstock (2006), the factor having the strongest influence on online customers' satisfaction and future
purchase intention is product delivery. Grewal et al (2002) concluded that for those shoppers, who would not like to
invest time in conventional shopping, online shopping provides a convenient alternative. The possibility of saving
time is an important factor facilitating online shopping. Keen et al (2002) found that demographic factors like age,
gender, education, and income has a significant effect on the attitude of the consumers towards online shopping. Their
research also revealed that internet users, who are educated are more likely to feel less uncomfortable to go for online
shopping. The results from a three country (USA, France, & Macao) study, conducted by Kuhlmeier and Knight
(2005), suggested that a positive relationship exists between customer usage and experience of internet and the
likelihood of making online purchases. Prior research has focused on a number of predicators of customers' online
shopping attitude, but few studies have been done in the Indian context. Hence, more research studies are needed to
study Indian consumers' attitude arising as a result of the shift from in-store to online shopping.
RESEARCH METHODOLOGY
There are two main data sources for the research study - secondary and primary. To collect the data for this research
study, both primary and secondary sources were used. One of the cardinal rules in data collection is to exhaust all
secondary data sources before conducting a primary study. The operational features of secondary data are that it
already exists and is easily available. Secondary data can be quite versatile and is used for many purposes
(Neelankavil, 2007). To collect secondary data, at first, the researcher reviewed articles related to research objectives
that appeared in the scholarly literature. Key journals and proceedings were systematically scanned for any articles
related to the research topic. In addition to that, search for the key words in peer reviewed journals were undertaken.
This search led to articles in other related journals. To conduct an empirical investigation, a survey was conducted,
using a questionnaire. At first,the items to be included in the questionnaire were decided. Next, the survey was
conducted to collect the data and then the data were analyzed and interpreted to find the answers to the research
objectives. The survey for data collection was carried out in the early months of 2009.The researcher developed a
questionnaire based on the literature, deriving issues pertinent to the research objectives. The questionnaire was pre-
tested in a pilot study to fine tune the questionnaire. The pilot study was conducted among a convenience sample of
twelve people consisting of neighbours, students, and colleagues, to evaluate how well the questionnaire was framed
and understood. Based on the pilot study and feedback from the participants, some items were reworded to improve
clarity. The respondents were randomly selected, from a city and two major towns in West Bengal, to remove the
biasness in samples. Unfortunately, complete random sampling was not possible for a topic related to the internet, as in
India, there is still much ignorance about internet among the people. There are many who don't have any idea about the
internet, and ,therefore, asking their views on the research topic would lead to totally inappropriate results. Due to the
nature of the study, respondents were randomly picked from only those who were in the age group of 18 - 65 years of
both sexes, either earning or with access to expendable income, and using the internet at least once a week. In this
study, random sampling method using Kish method of sampling is done. The Kish grid was developed by Kish in 1949,
and is commonly used by those conducting large scale surveys. In total, 316 respondents completed the questionnaire.
No replacement was made for households which refused to be a part of the survey or where the selected family member
did not match with the defined population. The Kish method involves some sequential steps in which, a) The
interviewer is to record the name, gender, age of all the eligible persons & their relation to the housewife (because she
is the one who is mostly available), b) Then the candidates are arranged according to their increasing age, and c) Using
a random number table, the respondent is chosen.
RESULTS AND DISCUSSION

Table 1 : Demographic Data Table 2 : Internet Usage Data
Sex Frequency Valid Percent FREQUENCY OF INTERNET USE
Male 237 75.0 Frequency Valid Percent
Female 79 25.0 Everyday 234 74.1
Total 316 100.0 Once In Two Days 70 22.1
Age Frequency Valid Percent Once A Week 12 3.8
18-20 15 4.7 Total 316 100.0
21-30 185 58.5 TIME SPENT PER INTERNET SESSION
31-40 73 23.1 Frequency Valid Percent
41-50 17 5.5 <1hr 77 24.4
50-65 26 8.2 1hr-2hr 136 43.0
Total 316 100.0 2hr> 103 32.6
Monthly Frequency Valid Percent Total 316 100.0
Family Income
(in `)
10000 4 1.3
10001-20000 64 20.2
20001-30000 74 23.4
30001-40000 118 37.3
40001-50000 28 8.9
More than 50000 28 8.9
Total 316 100.0

Table 3 : Online Shopping Experience And Satisfaction
Ever Shopped Online Frequency Valid Percent
No 114 36.1
Yes 202 63.9
Total 316 100.0
Satisfied With Online Shopping Frequency Valid Percent
No 22 10.9
Yes 180 89.1
Total 202 100.0
Table 4 : Online Purchase Satisfaction Vs Online Shopping In Future Cross Tabulation

Online Shopping In Future
No Yes Total
Online Purchase Satisfaction No 15 7 22
Yes 7 173 180
Total 22 180 202
Among the 202 respondents who shopped online, 89.1% were satisfied and 96.1% satisfied customers also engaged in
online shopping in future. This indicates that satisfaction level was very high among online customers, which is indeed
very good news for e-marketers in India. In response to the question what products/services they have purchased
online in the last four months, 35.6% of the respondents stated they have availed some type of service. Among the
products purchased online, laptop was purchased the most by 6% of the respondents, followed by computer (5%). For
rest of the products purchased by the respondents, the percentage falls below 5% for each product category. The
finding may make us infer that in India, people are more into the purchase of services rather than products online. A
possible reason for laptops being the most purchased product online may be the fact that the internet users in India tend
to be young students or professionals with a good expendable income. For this group of people, having a laptop is
extremely essential.
Table 5: Factors Facilitating Online Shopping
N=202 Mean Std. Deviation
Extensive & Current Information Available 4.1584 .76272
24x7 Availability 4.1386 .79838
Can Shop From Anywhere 4.0743 .70494
Can Engage In Other Online Activities While Shopping 3.7673 .82276
Home Delivery 3.6683 .86610
Cheaper Price 3.5644 .82155
The factors facilitating online shopping were measured on a five point Likert scale and anchored by 1 (not at all
important) and 5 (extremely important). The respondents were asked to rate the factors. The study investigated among
the 202 online shoppers the importance of factors that facilitate online shopping. The Table 5 reveals that availability
of extensive & current information is the most important reason for shoppers going online. The availability of huge
amount of information on the internet, and that also free of cost most of the times, is unmatched in the offline market.
With so much of online information, it becomes easier for the customers to make a decision on the product they want to
purchase or the service they want to avail. Surprisingly,cheaper price appears to be the least important factor
facilitating online shopping. This may imply that customers can get the benefit of low prices in the traditional market
but the other unique benefits provided by the internet cannot be matched by the physical market. The factors which
prevent online shopping were measured on a five - point Likert scale and anchored by 1 (not at all important) and 5
(extremely important). The respondents were asked to rate the factors. The study investigated among the 114 non
online shoppers that what prevents them from online shopping. The most important reason for customers not engaging
in online shopping is payment insecurity. Non online shoppers have a perception of risk associated with online
payment. It can be stated that security is the main reason for Indian customers not engaging in online shopping. This
implies that companies in order to gain customers trust should try to remove this fear from the minds of customers by
providing adequate security features as far as online payment is concerned. This is particularly important in case of
transaction in high risk or uncertainty environment like the internet. The least important reason for which the
consumers are not inclined towards online shopping is that they have no credit cards. As most of the time online
payment needs a credit card, so not having a credit card does become an obstacle for people from making online
purchase. Since this factor has been rated as the least important factor preventing online shopping, it may indicate that
most of the customers in India who use the internet do have credit cards.
Table 6: Factors Preventing Online Shopping
N=114 Mean Std. Deviation
Payment Insecurity 4.6404 .70557
Misuse Of Customer Data 4.2982 .75175
Absence Of Touch & Feel 3.8947 .82407
No Social Interaction 3.7281 .83385
No Credit Card 3.5439 .99681
HYPOTHESES TESTING
H1: There Is Association Between Age And Online Shopping.
Chi-Square Test
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 4.253 4 .373
N of Valid Cases 316
H2: There Is Association Between Monthly Family Income And Online Shopping.
Chi-Square Test
a
Pearson Chi-Square 44.641 5 .000
H3: There Is Association Between Frequency Of Internet Use And Online Shopping.
Chi-Square Test
Pearson Chi-Square 1.225E 2 .000
H4: Time Spent Per Internet Session And Online Shopping Are Related.
Chi-Square Test
Pearson Chi-Square 13.723a 2 .001
Results from the hypothesis testing shows there is no significant association between age and online shopping. The
reason for this may be attributed to the fact that at the time of the survey, most of the respondents from the households
who fitted the defined population are young people. Majority of the aged people in most of the households have never

used internet and as a result, their representation in the sample set is low. So this may indicate that it's the younger
people who are using the internet and engaging in online shopping. As evident from the above tables, there is
significant association between monthly family income and online shopping. Thus, it can be suggested that monthly
family income can be used by online marketers for creating segmentation and promotion strategies. There is
significant association between frequency of internet use and online shopping. The reason for this may be that with
more use of internet, customers' feel more comfortable and the perceived risk associated with online shopping is
reduced. This may result in the customers engaging in online shopping. There is significant association between time
spent per internet session and online shopping. Both frequency of internet use and time spent per internet session has a
significant association with online shopping. Higher frequency of internet use and more time spend per internet
session adds up to the experience of using the internet. So, it can be stated that internet use experience has a significant
association with online shopping.
CONCLUSION
The major findings revealed from the study in Indian context and their implications are discussed in this section. It can
be concluded that availability of extensive and current information is the most important factor which is driving Indian
customers to online shopping. Information gathering is a time consuming and costly affair in the physical market. This
is where internet provides a huge benefit to the customers. Informing refers that websites must provide relevant
information about their offerings. Relevant information directed at the needs and interests of the target audience
entices and propagates people to spend longer time periods at the company's website and make purchases. It can be
stated that concerns about online security is preventing customers from online shopping. So, e-marketers should try
their best to remove the security concerns from the minds of the customers by embedding adequate security features in
their websites and gain confidence of the customers. The present study also revealed that there is a significant
association of online shopping with monthly family income, frequency of internet usage and time spent per session of
internet use. This may imply that internet users with an average to high disposable monthly family income are more
likely to engage in online shopping than internet users with a low disposable monthly family income. As internet users
engage in using the internet more often, their perceived security concerns may gradually decrease and this may lead
them to engage in online shopping.
SCOPE FOR FUTURE STUDY

The present study needs to be refined by future researches working in this area. The study is preliminary, and it
provides the groundwork for future studies. More work needs to be done in this area before an absolute set of
recommendations can be made. Future studies should be carried with larger sample size, to verify the findings of the
present work. Future research studies should seek to predict shoppers attitude towards e-shopping within a specified
product or service category. Future studies can explore the differences in consumers' attitudes and behaviour with
regard to the choice in the online versus the offline environment.
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A Critical Review Of Gender Differences
In Online Shopping
*Prashant D. Amin
**Dr. Bijal Amin
RISE OF INTERNET IN INDIA AND WORLDWIDE

The position of women in a modern society is one of the true indexes of its cultural and spiritual attainments. It is
women only who would make the difference for the transformation of developing countries like India. The traditional
Indian woman too has undergone a metamorphic change in her roles and status, both at workplace and at home
coupled with changes in technologies causing women empowerment in economic, social, and political walks of lives
(Raja Ramchandran, 2000).To illustrate, the case before us is that of rise of Information Technology [IT]. Although,
the Internet has penetrated almost every aspect of everyday life, the current reporting of data on the Internet and gender
does not adequately capture the cultural and changing differences in gender roles, and provide a partial view of some of
the differences in ways men and women use the Internet (Ruby Roy Dholkiya and others, 2003).
A brief review of IT industry indicates that more than 70 per cent of Internet users use Internet for sending and
receiving emails followed with information search, chat sessions, and instant messaging etc. India was ranked fourth
after the [51 million] United States [198 million], China [120 million], and Japan [86 million] in terms of the absolute
number of Internet users by Computer Industry Almanac in 2005. The number of Internet users was 60 million in India
compared with 207 million of U.S., 123 million for China, and 86 million for Japan as on September 2006
(southasia.oneworld.net). According to Statistics, there were 1,114,274,426 Internet users worldwide representing
about 16.9 per cent of the population as in March 2007 (planning commission.nic. in).There were 38.5 million Internet
users in India in the year 2005 (www.emarketer.com). India emerged as the fastest-growing economy in terms of
number of Internet users with growth rate of 33 per cent having over 21 million Internet users aged over 15 years as on
January 2007 compared to 16 million in January 2006. Worldwide number of Internet users grew by 10 per cent to
reach 747 million people at the end of January 2007. The US leads with an online population of 153.4 million followed
with 86.8 million Internet users of China, and 53.6 million of Japan as well as 32 million of Germany, and 30 million
Internet users of UK. (www.iamai.in). According to Internet and Mobile Association India [IAMAI], the total value of
e-Commerce activities within India had crossed ` 570 Crore during 2004-2005 with projected figure of ` 2,300 Crore
in 2007 (www.iamai.in).
The use of Internet continued to grow at a slow but steady pace in India. To illustrate, the overall Internet usage
amongst urban people showed a healthy growth of 28 per cent during April 2006 and April 2007. A survey released by
IAMAI in association with IMRB (Indian Management Research Bureau), based on a primary survey conducted in
early 2006 amongst 16,500 households covering 65,000 individual across 26 major Metros and small towns in India in
addition to 10,000 Business and 250 Cyber Cafe Owners in September 2006 found that there were 37 million Internet
users in India with 23 million active users (www.iamai.in).
GENDER & PROPORTION OF INTERNET USERS IN INDIA

According to IAMAI, there were 38.5 million Internet users in India during 2007. It was found that around 12.32
million online women Internet users were registered in India during 2005-2006, showing an increase of 4 per cent
reflecting decline of 4 per cent male Internet users in India. It was found that the number of women Internet users
surfing the Internet crossed the figure of 12 million mark in India in 2006.Of the total Internet users, the percentage of
women web users increased from 28 per cent in 2005 to 32 per cent in 2006. The estimated figures for the male-female
ratio will be closer to 60:40 ratios by 2007 in India, though the absolute number of male Internet users remains higher
*Dy.Chief Engineering, Elecon Engineering Company Limited, Vallabh Vidyanagar, Gujarat.

**Faculty Member, Parul Institute Of Engineering And Technology, Vadodara, Gujarat. Email : bijuzaveri@gmail.com
than women Internet users.
A study jointly conducted by the IAMAI and IMRB International with coverage of around 65,000 individuals from
16,500 households surveyed in 26 different cities across India showed that the number of heavy Internet users in India,
had grown to 38 per cent in the year 2006, as against barely 16 per cent of 2001. Interestingly, the average time spent on
Internet, in terms of minutes per week increased with the increasing age of the Internet user, showing that the older
population spent more time on the Internet as against the younger ones who are considered to be more Internet-savvy.
While the school going children spent an average of 322.3 minutes a week on the Internet, the college going students
spent an average of 433.2 minutes per week and the older men spent an average of 580.5 minutes a week. Working
women spent 535.3 minutes per week whereas non-working women spent an average of 334.5 minutes each week on
the Internet. (www.iamai.in).
Another survey conducted by IAMAI, with a sample size of 6,356 men and women Internet users too revealed that the
use of Internet by women is more for personal purposes than for work. To illustrate, 96 per cent of women used e-mail
for personal purpose while 92 per cent sent work related e-mails.
44 per cent of the women engaged in chat for personal purpose while only 26 per cent chatted to discuss work related
matters. The other uses of Internet included gathering of information on matrimonial aspects; job search, and
astrological predictions on a higher scale amongst women as compared to male Internet users (Source: Ibid).
Overall, though in numerical terms, the proportion of the male Internet users increased, but in relative terms, it has
showed an decline. To illustrate, the figures of male Internet users came down from 72 percent of 2004-2005 to 68 per
cent in 2005-2006 whereas the figure of female Internet users increased from 28 per cent in 2004-2005 to 32 per cent
in 2005-2006 (www.research.stikipad.com).
GENDER & USES OF THE INTERNET

A group of researchers have also attempted to uncover variations in terms of uses of Internet considering the gender of
the Internet user that has mainly revealed the following.
A research study undertaken by Rosie Heimrath and Anne Goulding in 1999, when released its findings in 2001
provided that the use, interest and confidence while using the Internet was found to be as high amongst female Internet
users as compared to its male Internet users. The females had not taken to the Internet as rapidly.
Linda A. Jackson and others (2001) made efforts to examine gender differences in use of Internet and factors
responsible for these differences based on a general model of Internet use, and found that females used e-mail more
than did males, males used the Internet more than females, and females reported more computer anxiety, less computer
self-efficacy, and less favorable and less stereotypical computer attitudes. Path analysis used by the researchers to
identify mediators of gender differences in Internet use revealed that computer self-efficacy, loneliness, and
depression accounted in part for gender differences, but that gender continued to have a direct effect on use after these
factors were considered.
Thomson S H. Teo (2001) employed efforts to evaluate linkage between the use of Internet vis-à-vis demographic
variables such as gender, age, educational level and motivation variables perceived ease of use, perceived enjoyment,
and perceived usefulness associated with Internet usage activities defined in terms of messaging, browsing,
downloading and purchasing etc. It was found that male Internet users were more likely to engage in downloading and
purchasing activities while female Internet users were more likely to engage in messaging activities.
Randall S. Sexton and others (2002) put forward findings of their empirical research study carried out to identify
factors causing influences on the individual use of the Internet and e-commerce based on analysis of a wide range of
variables such as gender, overall computer usage, job related use and home etc. The study found that Males exhibit
high levels off Internet usage probably due to a long history of cultural bias in areas of science and technology.
Familiarity and comfort with computers in general can lead to higher levels of Internet usage.
ONLINE SHOPPING: A GROWING PHENOMENON IN INDIA &

WORLDWIDE
Online shopping has been growing as a widely well-accepted route to shop online for different products and services
like computer products; automobiles; travel products; investment products; clothing; flowers; books; music; and
homes. The wide spread use and reasons for increased online shopping includes technological advances; changed
perceptions of the corporate world; convenient and customized offering by companies; availability of better
navigation software as well as search engines; increase in the quality and quantity of the available information on the
Internet, and above all, changing lifestyles of Internet users searching for pleasant and exciting experience. The online
presence of well-known companies and brands too are responsible for generating greater interest among Internet users
towards online shopping. Its key benefits to marketers include viz., lower cost of doing business; an opportunity for
smaller entrepreneurs for doing business and that of also competition with bigger organizations as well as easier
availability of information about products and services at relatively lower prices (Hoffman, Novak, & Chaterjee,
1995).
The results of the AC Nielsen online Consumer Opinion Survey have demonstrated that approximately 10 per cent of
the world's population -that is more than 627 million people shop online, at least once. Europe and North America have
the highest number of online shoppers, with Germany, Austria and the UK topping the list, with at least 95 per cent of
online buyers.
A survey covering 21,100 respondents in 38 markets from Europe, Asia- pacific, North America, Latin America and
South Africa clearly showed an upward trend in global online shopping. The study focused on online shopping
experiences of Internet users around the world and respondents were asked about when they last did an online
purchase, what were the items last purchased, the modes of payment, which payment card was used the most and the
most preferred payment mode used for online shopping. Across the globe, over 212 million online shoppers mentioned
books as among the last 3 items they purchased online, over 135 million people purchased DVDs and video games,
nearly 135 million made air reservations, over 128 million purchased clothes/accessories/shoes, over 112 million paid
for downloading music, CDs over 106 million purchased electronic devices.
Close to 98 million bought computer hardware and over 86 million made hotel and\or tour bookings. Online retail sales
are expected to grow from $81 billion in 2005 to $144 billion in 2010. In the Asia pacific region, South Korea and
Taiwan were ranked as highest, with at least 90 per cent of online buyers (Sita Mishra, 2007).
The IAMAI has projected the total value of e-Commerce activities as ` 2,300 Crore in the 2007. Online shopping in
India too relies upon several driven like access to information and communication; proliferation of cyber cafes, and
above all attitudes of Indians towards variety and ease, which is only possible through online shopping. In India, it is
posed for greater acceleration as more manufacturers and marketers have begun to use the hybrid concept by
integrating the Internet into their sales model. The Indian online shopping market is yet to take-off in a considerable
way and is far behind the global trend. Internet is used more for searching than buying products and services. To
illustrate, more over, online shopping is now prevalent in nearly 2,000 town and cities including tier-II cities like Surat,
Ankleshwar, Solapur, Kottayam, Faridabad and Bhopal. Maharashtra tops the list with Kerala yet to pick up.
According to Third Annual Global E-Commerce Report of Taylor Nelson Sofres (TNS) Interactive, the most popular
online shopping in India comprises of products such as is clothes (46 per cent of shoppers), music\CDs (29 per cent of
shoppers) and books (26 per cent of shoppers). Therefore, big online players too have prepared themselves to capture
the opportunity. To illustrate, EBay has merged with bazze.com to start its Indian operation goods, which are sold
online and includes books, electronic gadgets, air and rail tickets, apparel, gifts, computer peripherals, audio and video
CDs and DVDs, magazines, sport goods, movie tickets, jewellery and toys.
Though, many consumers are not using online shopping system in India, and it seems that at least, as of now, online
shopping in India is not keeping up with the global trends of electronic marketing. The cautious Indian consumers
obviously have many doubts, apprehensions, and are under fear while using the Internet services for accessing
company's website mainly for the purpose of online shopping. As a result, many online shopping websites are now
offering cash-on delivery to overcome the security concerns cited by Indian consumers. Secured payment gateways
and use of SSL that is Secure Socket Layers, a protocol for transmitting private documents via the Internet have also
become the accepted norms among e-commerce companies in India to offer better security to its consumers enabling
them to use credit cards.
REVIEWING STUDIES ON GENDER & ONLINE SHOPPING IN INDIA &

WORLDWIDE
Despite an increasing number of online shoppers and offering of wide range of products that are on the Internet, one
finds paucity of research work undertaken with a focus on demographic variables especially gender as well as the
attitudes, perceptions and profiling of online shoppers in India. An attempt has been made to throw light on gender
based differences with regard to online shopping activities in India .ACNielsen, based on their research study, found
that more and more Indians are willing to opt and make use of online shopping and this frequency of online shopping
by Indian online shoppers may super cede this frequency of global average online shopping in the near future. Though
the prevalent figure of online population of India may reveal a small proportion of its total population but, it represents
a set of consumers that offer marketers an attractive combination, greater influence, and the willingness to adopt
technology faster. It is very well supported by the expected growth projections based on the research study of the
IAMAI that has showed that there would be 38.5 million Internet users in 2007. The Internet & Online Association of
India [IOAI] Research Report conducted in association with Cross Tab Marketing Services based on a total of 3099
respondents aimed at understanding the profile, Internet usage, products purchased along with propensity to shop
along with the nuances of online shopping with the online shopper's affinity and aversions to online shopping in order
to track Internet users' taste for online shopping. Out of the total respondents, it was found that 55 per cent had shopped
online, and 87 per cent had shopped online more than once. 25 per cent of regular online shoppers were in the age group
of 18-25 years, 46 per cent were in the age group of 26-35 years and 18 per cent were in the age group of 36-45
years.85 per cent of Online Shoppers were male, whereas 15 per cent were female online shoppers
(www.crm2day.com).Besides, various researchers have carried out varied research studies considering
multidimensional aspects of online shopping and also covering issues related to gender based online shopping that has
revealed the following.Tak Kee Hui and David Wan (2006) found that there was a general consensus amongst
Singaporeans that the Internet is a convenient medium for information search or making purchases. Females indicated
a strong dislike for not being able to savor a physically fulfilling shopping experience online.
Yu-Bin Chiu, Chieh-Peng Lin Taiwan and Ling-Lang Tang (2004) proposed a model of online purchase intentions and
provided that the influences of personal innovativeness and perceived usefulness on attitudes and online purchase
intentions were similar for males and females. Helga Dittmar and others (2004) through their two studies reported on
gender differences in attitudes toward conventional buying and online buying. It was revealed that the online
environment has an effect on buying attitudes, but more strongly, concerns are amplified rather than changed in the
shift from conventional to online buying; women's motivational priorities show a reversal, and less involvement in
shopping. In contrast to men, women's online buying is associated with barriers and facilitators grounded in their
attitudes toward conventional buying.
Thompson S H. Teo (2001) examined demographic variables such as gender, age, educational level and motivation
variables such as perceived ease of use, perceived enjoyment, perceived usefulness associated with Internet usage
activities defined in terms of messaging, browsing, downloading and purchasing. The study showed that males are
more likely to engage in downloading and purchasing activities while females are more likely to engage in messaging
activities.
A study by Lynda Andrews and others (2007) attempted to compare the experiential consumption values that motivate
consumer choice to shop online for both male and female purchasers and non-purchasers. They found that male online
shoppers are discriminated from female online shoppers by social value and from male non-purchasers by conditional
value. Female online shoppers are discriminated from male purchasers by functional value and from female non-
online shoppers' purchasers by social value.
Bijou Yanga and David Lester (2005) attempted to examine the existence of a gender gap in online shopping and found
that, when it comes to online shopping, women tend to be affected by more factors than are men. Females seemed less
inclined to take moral risks for money. Men seemed not to be affected by psychological factors.
The author studied differences in the use of the Internet by gender, with a consideration of access to the web, use of
communication facilities related to email and chat rooms, frequency of use, and types of websites used. Men were
more likely to use websites that provided financial information, government information, news and current events, and
sexually explicit information. Women were significantly more likely to use religious and church sites, as well as
cooking and recipe sites. (Ira M. Wasserman, Eastern Mich, 2005).The author examined that significant gender
differences emerge with respect to evaluative criteria and use patterns, with men liking some of the bells and whistles
and women using academic web sites more. Women are more likely to adopt the technology in a manner that fits with
their everyday practice, as compared to men, who are more likely to use the technology for its own sake. (Ananda
Mitra, Jennifer Willyard, Carrie Anne Platt, Michael Parsons, 2005).
The author examined with exploratory studies whether consumer trust appears to vary by gender. This study detected
only minor gender based perception of online shopping, gender based variations, registering a high level of concern
overall, regardless of gender. Online shoppers' innovators were generally younger, educated, technology competent
males. The results suggested only marginal and statistically insignificant gender differences. (Alisa Kolsaker and
Claire Payne ,2002)
REVIEWING STUDIES ON GENDER & ONLINE VERSUS OFFLINE

SHOPPING IN INDIA & WORLDWIDE
Fram, Eugene H. and Grady, Dale B. (1995) carried out an online research with the help of a questionnaire on the
Internet to assess consumer reactions of 378 online shoppers and it revealed that 80 per cent of them were men. They
purchased relatively few product categories viz., computer hardware/software, books, music, magazines and nearly all
of them were either satisfied, or highly satisfied, with their online shopping. Their major concerns were related to
credit card security to improve the online shopping environment. They wanted more visuals and graphics; to locate
products, and services easily and also to have better and faster software. Women online shoppers appeared to have little
interest in online shopping. Alka Verma and others (2000) found that generally higher amounts of Internet use for non-
shopping activities are associated with an increased amount of Internet product purchases. Importantly, however, this
relationship is moderated by domain-specific but not general innovativeness. Implications for business practice and
academic research are provided.
Sheril L. Loken, and Stanford (2003) conducted a web based survey that was responded by 130 faculty and staff from
university located in the South Eastern United States and suggested that the difference between online shoppers and
offline shoppers correspond with categories of adopters, and that the educational needs of consumers also differ based
on their previous experience with online shopping. The results of this study indicated that online shoppers are younger
and have more self-reported computer skills than non-online shoppers. Online shoppers revealed several perceived
advantages of shopping.
Ruby Roy Dholkia and Outi Uusitalo (2002) revealed about behavioral pattern of switching to electronic stores of
online shoppers and related it with consumer characteristics and their perceptual benefits of online shopping to study
its association with gender, socio economic status of female online shoppers. The study found that gender had no
impact on the perception of computer shopping benefits but did impact the perception of store shopping.
Kaun-pin Chiang and Ruby Roy Dholkia, (2003) examined consumers' intention to shop online during the information
acquisition stage with specific consideration of three essential variables that are likely to influence intentions
convenience characteristics of shopping channels, product type characteristics, and perceived price of the product.
They found that convenience and product type influence consumers to engage in online shopping.
Charles Dennis, Lisa Harris and Balraj Sandhu, (2002) considered aspects of shopping & shopping styles, comparing
e-shopping with bricks and mortars, and speculated on the possible future of shopping by relating their age and
income variables. Web shoppers had a strong preference for shopping in shopping centers rather than online as more
enjoyable and sociable.
Bijou Yang and David Lester (2004) undertook a survey of eleven positive features and ten discouraging features of
online shopping that was administered on 180 students which identified certain behavior patterns for online shoppers
versus offline-shoppers. It was found that online shoppers have consistently stronger positive feelings about online
shopping than do offline-shoppers whereas offline-shoppers have more negative feelings about online shopping than
do online shoppers.
Patricia Source, Victor Perotti and Stanley Widrick (2005) evaluated the shopping and buying behavior of younger and
older online shoppers as mediated by their attitudes toward Internet shopping and found that, while older online
shoppers search for significantly fewer products than their younger counterparts, they actually purchase as much as
younger consumers. Attitudinal factors explained more variance in online searching behaviour.
Sendy Farag, (2006) conducted an empirical study on e-shopping and its relationship with in store shopping from the
Netherlands and USA to study its association with behavioral and attitudinal variables of online shoppers. The findings
indicated that online buying can be explained by socio- demographic, spatial, behavioral and attitudinal variables.
Thompson S. H. Teo (2006) examined dilemma of adopters and non adopters to buy or not to buy online in Singapore
to relate it with their income, education level and Internet usage. The main reason cited for not purchasing online was
the preference to examine products. Ronald E. Goldsmith and Leisa R. Flynn (2004) examined selected demographic
and psychological characteristics that lead consumers to buy clothing online and their findings showed that that online
apparel buying is motivated more by Internet innovativeness than by clothing innovativeness.
Chaung Hoon Park and Young Gul Kim, (2003) focused on identification of key factors affecting consumer purchase
behavior in an online shopping context with focus on Information satisfaction, relational benefit, and website
commitment. The results showed that information satisfaction and relational benefit were the significant factors
affecting a consumer's site commitment in online shopping context.
Shwu Ing wu, (2003) attempted to evaluate the relationship between consumer characteristics and their attitude
towards online shopping by relating it to online shoppers' demographics; benefit perception; lifestyles, and attitudes.
The study found that consumer demographic items had a significant relationship with the attitude toward online
shopping.
Tulay Giard and others (2003) empirically studied the relationship of the type of product; shopping orientations and
demographics with preferences for online shopping on the Internet. The researchers' findings also confirmed that the
relationships of shopping orientation and demographic variables with purchase preference for shopping online
significantly differ by product category.
Heejin Lim and Alan F. Dubinsky (2004) attempted to analyze an expectancy value approach to study consumers'
perception of e-shopping characteristics with reference to e-store factors viz., merchandise; convenience,
interactivity; reliability; promotions, and navigation. The findings obtained demonstrate that consumers' attitude
towards online shopping was positively related to their perceptions of Web site merchandise and reliability attributes.
Despina A. Karayanni (2003) examined an empirical evaluation between online shoppers and offline-shoppers'
compatibility, relative advantage and demographics with their Internet browsing activities; use of direct shopping;
time efficiency, and availability of 24 hours of online shopping. The study found that web shoppers seem to be less
concerned with enjoyment derived form traditional shopping.
A M. Levin, I. P. Levin, J. A. Weller, (2005) focused on the tradeoffs consumers make in evaluating online and offline
shopping modes based on multi-attribute analysis of preferences for online and offline shopping as well as differences
across products; consumers, and online shopping stages to study its linkage with gender and age of online and offline
shoppers.
SUMMARIZED FINDINGS OF RESEARCH STUDIES ON GENDER & ONLINE

SHOPPING
An attempt has been made to summarize key findings received from various research studies relating to gender based
differences in case of online shopping activities .One could find significant differences in the ways males and females
use computers. To illustrate, females use online communication as a means of building and sustaining relationships,
whereas males favour task oriented communications. Females appear to be more concerned about personal privacy
particularly, about receiving unsolicited e-mails and are more cautious about online shopping as compared to their
male counterparts. Females feel less at ease exploring websites, or at least do not find this activity as enjoyable as
males do. Females tend to see conventional shopping as an on all sides of and psychologically involving activity and
experience, in which the actual ownership of the products forms a comparatively small part. In contrast, males
frequently depicted shopping trips as a difficult and distasteful task, best carried out as quickly and efficiently as
possible that has to be endured as a means to achieve the main goal of buying: getting the goods. It is suggested that
females may be more concerned about trust, security and confidentiality, as elements of a good relationship and thus
record higher levels of concern about these important online issues. Females' major concerns are related to payment
security. Only marginal differences were detected between the genders about the payment security. Gender appears to
be equally concerned about providing confidential information to a website. (Alisa Kolsaker and Claire Payne, 2002).
Gender differences were found to be also associated with the personality traits of extraversion and neuroticism of male
and female online shoppers. For males, the more extraverted they are, the greater their use of leisure services, and, the
more neurotic they are, the less their use of information services. Females are more conscious of the possible link
between heavy use of credit cards and the danger of debt. Females are more cautious about spending money and were
more aware of saving and paying bills on time. Females are more retentive and conservative than males. Social
prestige discriminates males who shop online from female purchasers. Perceived risk is the most important
consumption value for females who choose not to shop online. Functional value is the most important consumption
value for females to use the Internet for shopping. Female shoppers perceive value in the functional aspects such as
relative advantage of shopping online. Females are more sensitive to relevant information online than males when
making judgments, causing subsequent purchase attitudes and intentions rendered by males and females to vary.
(Lynda Andrews and others, 2007).Moreover, in the field of IT usage, males tend to exhibit more strongly and
sensitively the attitudes of task-oriented and instrumental applications than females, indicating that the influence of
perceived usefulness on attitudes via IT usage is stronger for males than for females. The influences of personal
innovativeness and perceived usefulness on both attitudes and online purchase intentions are similar for both the male
and female shoppers. The finding of significant gender differences has provided additional support to psychological
theories, stating that males and females have different gender-based perceptions which can influence their preferences
and decisions while making online shopping. The stronger influence of perceived ease of shopping on both attitudes
and online purchase intentions for females compared to males indicates that online shopping intentions and attitudes
are sensitive to female perceptions, given a higher demand for the physical in store environment or a stronger desire for
the sensory pleasures associated with touching a product (Yu-Bin Chiu, Chieh-Peng Lin, Ling-Lang Tang, 2005).
Significant Gender differences also influences personality factor of online shoppers. Female online shoppers indicated
a dislike for not being able to savor a physically fulfilling shopping experience online. Female online shoppers are
found less emotionally satisfied with e-shopping and they tended to find online shopping more of a hassle than males.
There existed a general consensus amongst the male and female online shoppers- that the Internet is a convenient
medium for information search and for making an online shopping (Tak-kee Hui and David Wan, 2006). Male online
shoppers are comparatively more motivated by functional factors, whereas female online shoppers are more motivated
by emotional and social factors. Female online shoppers tend to focus on the often enjoyable process of shopping,
whereas male online shoppers focus on the outcome to obtain the actual goods with the least fuss. Female online
shoppers have highly positive attitudes toward shopping and associate it with a leisure frame, whereas male online
shoppers tend to have negative attitudes towards shopping and see it as work that they want to accomplish with
minimum input of time and effort. The buying environment may play a much more important role for female online
shoppers, whereas male online shoppers may be able to fulfill their main concerns relatively easily in either
environment. For female online shoppers, perceived advantages of conventional shopping, such as emotional
involvement and social experiential benefits, may function as barriers for online shopping. Buying consumer goods is
more integral to the personal and social identity of female online shoppers, at least in terms of traditional gender
identity functional issues that are particularly important to male online shoppers and emotional-social and identity-
related motivations are particularly important to female online shoppers (Helga Dittmar and others, 2004). Male
online shoppers are more likely to engage in Internet usage activities such as downloading and purchasing activities as
compared to females (Thompson S.H. Teo, 2001). Gender had no impact on the perception of computer shopping
benefits, but did impact the perception of store shopping, specifically female rated store shopping more positively on
the hedonic benefit, consistent with the view that more women are recreational shoppers (Ruby Roy Dholkia and Outi
Uusitalo, 2002).
MARKETING IMPLICATIONS OF FINDINGS OF RESEARCH STUDIES ON

GENDER & ONLINE SHOPPING
Women and men seem to differ in their shopping orientation. Since gender is generally acknowledged to strongly
influence response to marketing strategies, specifying the moderating impacts of gender can guide e-marketers in
designing different strategies for different consumers. Marketers need to seriously consider some of the following key
marketing implications before they create, build and offer online products/services to male and female online
shoppers. It calls for finding of ways of improving public perception of their trustworthiness in order to take advantage
of the potential of e-commerce, for the benefit of consumers and organizations. Both, male and female online shoppers
have shown equal concern on security of payment, confidentiality of information and integrity of returns and refunds
etc., suggesting that marketers need to create and build trust amongst both of them. Companies offering online
shopping facilities need to understand gender differences as more females can be encouraged to shop online.
Marketers can segment its target markets through their relativistic preference for an interactive experience in terms of
the identified consumption values for the specified gender, and shopping behavior and then drive their behavior online
through integrated marketing communications campaign that could involve both online and offline shopping
strategies.Marketers should develop an offline campaign to target and persuade existing female online shoppers by
actively promoting online shopping events as social activities. It calls for combining of both online and offline high
profile advertising and incentive programs to emphasize the social prestige value. Marketers should emphasize risk
reduction communication strategies to handle security issue of online shoppers.
Marketers shall focus also on social-experiential factors which are seen as an important benefit of conventional
buying, and their lack as a serious drawback of the Internet. Especially for female online shoppers, social-experiential
factors are important in order to discriminate between female online shoppers versus non- online shoppers. E-
marketers must concentrate on setting up of user-friendly online shopping system, which too is emphasized in its
marketing communication campaigns. The use of word-of-mouth broadcasting by other female consumers could be an
important approach to help female consumers to overcome hurdles and barriers of accepting online shopping. With the
help of use of an interactive virtual reality along with background music, e-marketers could efficiently demonstrate to
female consumers regarding how to use products in a fashionable manner, and engage them with surprising visual
effects, and thus successfully stimulate their positive attitudes and increase online shopping intentions. E-marketers
should provide increased personal sales assistance or more security features, based on that they can formulate
strategies to accommodate such concerns when marketing their products over the Internet. It also calls for wider use of
providing and sharing of information coupled with support of educational awareness programmers in order to
convince the less educated and to persuade the starters of online shopping. E-marketers need to make consumers
realize that online shopping is relatively hassle free and offers products/ services at competitive prices. E-marketers
aimed at targeting a female market must focus on and consider social-experiential dimensions as well as needs such as
increasing visual material, or offering online alternatives to trying consumer goods. E-marketers should focus on
making the experience of online shopping as widely accommodating and users friendly to emphasize on the positive
features of online shopping.
FUTURE RESEARCH DIRECTIONS ON GENDER & ONLINE SHOPPING

The findings of research studies carried out on gender and online shopping activities hold interesting and serious
business implications. An attempt has been made to outline few of the areas that would become crucial in deciding the
success and wider penetration of online shopping in near future.
Researchers need to focus on the different gender based perceptions such as personal values and social influence that
can influence their preferences and decisions during online shopping. These additional perspectives should be
included to provide a more extensive explanation of consumer choice behaviour towards online shopping. More
research studies shall be required to investigate whether large number of countries too displays similar gender
differences or not in case of online shopping intentions. Further evaluation of demographic variables of online
shoppers such as age, personal income, marital status, ethnic groups and career life cycle and its linkage with their
shopping attitudes could be based on a specific industry or product.
Researchers need to understand the factors that help and hinder female's and men's participation in on-line shopping,
as well the quality of their on-line shopping experience, and the positive or negative consequences it may have for their
shopping and spending patterns. It calls for further research required in order to specify the online shopping activities
involved in the use of Internet and to identify the settings such as work, home, school, public facilities where these
different types of Internet usage activities could be engaged in by males and females.
CONCLUDING REMARKS
Learning gender differences is significant. Although, gender differences in attitudes towards use of Internet may
lessen over time with the increased participation of females, it is unlikely that these differences will disappear any time
soon. Several analyses of consumer behaviour have suggested that males and females differ particularly in their
processing of information. Males and females respond in different ways to alternative consuming tasks and stimuli
such as pictures versus words. Females easily and quickly respond to non-verbal stimuli by evoking more associative,
interpretations and more elaborate descriptions than males. In order to attract more female online shoppers, marketers
should focus on female online shoppers; perceive her value in the functional aspects and emotional aspects such as
relative advantage and social prestige value of shopping online and social experiential dimensions. The stronger
influence of perceived ease of purchasing on both attitudes and online shopping intentions for females compared to
males indicates that online shopping intentions and attitudes are sensitive to female perceptions, given a higher
demand for the physical environment or a stronger desire for the sensory pleasures associated with touching a product.
Marketers could better target consumers and consequently foster more positive attitudes on their online shopping
intentions. Offering male consumers the right products whenever they need them and responding to inquiries in a
timely fashion can strengthen the attitudes and purchase intentions of male consumers. Establishing an online
consumer community based on gender and hobby provides another method of improving female perceptions of ease of
shopping owing to the effective communications among female consumers themselves. Compared to females, males
tend to reveal more masculine traits such as being assertive, impatient, and goal-oriented indicating that they desire to
successfully accomplish efficient online purchases without distraction.( Yu-Bin Chiu, Chieh-Peng Lin, Ling-Lang
Tang,2005).Hedonic benefits may be obtained from social components of the online shopping experience. E-retailers
interested in moving their customers to some form of electronic shopping must improve perceived hedonic benefit and
not concentrate only on utilitarian benefits. Finally, the gendered nature of conventional buying emerged clearly;
women prefer emotional and psychological involvement in the online and offline shopping process, whereas, men
focus on efficiency and convenience in obtaining shopping outcomes from the actual products.
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30) Ruby Roy Dholkia and Outi Uusitalo (2002); Switching to electronic stores: consumer characteristics and the perception of shopping benefits; International
Journal of Retail & Distribution Management; Vol. 30, No.10; 2002 pp. 459-469.
31) Sendy Farag and others (2006); E-shopping and its relationship with in store shopping: empirical evidence from the Netherlands and USA; Transport reviews;
vol.26. No.1 pp. 43-61
32) Sheril & Stanford (2003); Comparing online and non-online shoppers; International Journal Of Consumer Studies; Vol.27, No.2; March 2003; pp. 126-133.
33) Shwu Ing wu (2003); The relationship between consumer characteristics and attitude toward online shopping; Marketing intelligence and planning; pp.37-44.
34) Sita Mishra(2007); Consumers' attitude towards online shopping for clothing; The ICFAI Journal of Marketing Management; Vol.6, No.1, 2007; pp.32-40.
35) Tak-kee Hui and David Wan (2006); Factors affecting Internet shopping behavior in Singapore: Gender and educational issues; International Journal of
Consumer studies; 2006; pp.1-6.
36) Thompson S.H. Teo (2001); Demographic and motivation variables associated with Internet usage activities; Internet Research: Electronic networking
applications and policy; Vol. 11, No 2; 2001; pp. 125-137.
37) Tulay Giard and others (2003); Relationship of type of product, shopping orientations and demographics with preferences for shopping on the Internet; Journal
of Business and Psychology; Vol.18, No.1; 2003; pp.101-118.
38) Yu-Bin Chiu, Chieh-Peng Lin, Ling-Lang Tang( 2005); Gender differs: assessing a model of online purchase intentions in e-tail service; International Journal
of Service; Industry Management; Vol. 16, No. 5; 2005; pp. 416-435.
WEBLIOGRAPHY
1) http://planningcommission.nic.in/plans/planrel/fiveyr/10th/volume2/v2_ch7.
2) http://research.stikipad.com/language/show/Hindi
3) http://ritim.cba.uri.edu/wp2003/pdf_format/Wiley-Encycl-Internet-Usage-Gender-Final.pdf (gender and Internet)
4) http://southasia.oneworld.net/article/view/139805/1/ 05-05-07
5) http://static.scribd.com/docs/e8fdfkdryzyou.pdf
6) http://www.crito.uci.edu/noah/HOIT/HOIT%20Papers/Gender%20Asymmetry.pdf
7) http://www.crm2day.com/news/crm/114943.php
8) http://www.iamai.in
9) http://www.iamai.in/ioainnews.php3?article_mon=Oct&article_year=2006 09-05-07
10) www.Emarketer.com

Life Insurance & Working Women : A
Critical Study Of Factors Affecting
The Purchase Decision
*Dr. Manish Srivastava

**Megha Rastogi
INTRODUCTION
As the economy is developing, the mind set of the people is also changing at a very fast pace. Some decades back, the
best place for women was considered to be their home. It was thought that women are born to look after the family and
children. They were not allowed to work outside because it ruined the reputation of the family and at the same time, it
was not accepted by society. But now the scene has changed and so has the position of women in society. Women are
working in every field. Their earning is at par with that of their male counterparts and they enjoy both personal and
professional life, but in terms of insurance, they are either under insured or uninsured. Despite all of the changes, many
married women still rely on their husbands' insurance policy to protect them. Studies have shown that while women
indicate they understand life insurance as a product, few have quantified its economic value. A recent research
conducted by Prudential Financial in USA says :
]Nearly 80% of women say they understand life insurance well or somewhat well (It is worth noting, that life
insurance ranks among highest in women's understanding of financial products, second only to “savings accounts.”).
]However, few women have put a price on their human life value. Just one out of three have preparations for
premature death and life insurance. More than four in ten (44%) have not even discussed the issue with their spouse.
Another survey by country Insurance & Financial Services reveals that:
]76% of women (vs. 69% of men) rate life insurance as very or somewhat important,
]Fifty six percent of working women (who have life insurance coverage) do not believe or are unsure that the amount
of coverage they have is adequate.
]46% full time working women have not taken any steps to determine their life insurance needs.
]Although 69% of Americans believe both parents in a household -where one parent works and the other stays at
home to care for children- should have life insurance, just 7% report that to be the case in their home.
]Today, 59 percent of women have at least some life insurance (compared to 64 percent of men).
In India, social taboos and illiteracy has made the situation worse. Working women also do not have the right to spend
their money as per their wishes. The latest National Family Health Survey (NFHS) found that one in six married
working women had absolutely no control over the money they earned; only one in ten married women were able to
make even relatively insignificant decisions, such as visiting friends and family and more than a quarter of them had
say on the crucial matter of their own healthcare. The situation in India is shaping towards the need of Insurance
products among working women. There are some companies, including the largest insurance player, that have come up
with policies exclusively for women, but the awareness and interest towards insurance products is quite less. This
paper is an attempt to know the behavior of working women towards the insurance products.
LITERATURE REVIEW
There is no such study available which studies the factors affecting the selection of life insurance product for working
women. There are some studies regarding some factors affecting selection decision. A study done by Xumei Zhang at
el. (2007) has found that worrying about future, economical condition, cognition about life insurance and adventure
*Associate Professor, KIET School of Management, Krishna Institute of Engineering & Technology, Ghaziabad, Uttar
Pradesh.Email : manishiftm@gmail.com
**Lecturer, Department of Management Studies, Institute of Foreign Trade & Management, Moradabad,Uttar Pradesh.
Email : megharastogimoradabad@gmail.com
activities preference have significant positive effects on the intention of purchasing life insurance. Economical
condition also has significant positive effect on the premium of purchasing life insurance; health status has significant
negative effect on the premium of purchasing life insurance. Headen and Lee (1974) studied the effects of shortrun
financial market behaviour and consumer expectations on purchase of ordinary life insurance and developed structural
determinants of life insurance demand. They concluded that life insurance demand is inelastic and positively affected
by change in consumer sentiments; interest rates playing a role in the shortrun as well as in the longrun. Cargill and
Troxel (1979) ) studied the effect of interest rates on life insurance demand. He concluded that that the competing
yield is negatively related to the demand for life insurance.Greene (1954), Fortune( 1973) and Brown and Kim(1993)
examined the impact of the expected inflation rate on life insurance demand .Since a rising inflation may lead to
devaluation of the future benefits from purchasing life insurance, inflationary expectation would seem to dampen
insurance demand. The findings from these studies show that inflation is indeed statistically significant and negatively
related to life insurance. Babbel (1981) studied the detrimental influence of inflation on demand. He identified
empirically that life insurance sales in Brazil were still affected by inflationary expectations even after policies were
linked to a price index. He concluded that anticipated inflation can lead to higher perceived real costs of life insurance,
even when policies are index-linked.Schlesinger (1981) reveals that an optimal insurance decision is directly related to
the level of risk aversion of the insured person and shows, following Pratt (1964) and Sziprio (1985) that the more risk
adverse an individual is, the higher the amount of insured. Lewis (1989) and Showers and Shotick (1994) studied the
effect of the dependency ratio on life insurance consumption. Lewis' theoretical explanation of dependency ratio
influence (through term-life polices) is that life insurance is purchased to satisfy the needs of dependents, and that
individual demand depends on the demographic structure of that household. He found out that the number of
dependents act as an influence on the demand for life insurance.
The study by Truett et al. (1990) discussed the growth pattern of life insurance consumption in Mexico and United
States in a comparative framework, during the period 1964 to 1984. They assumed that at an abstract level, demand
depends upon the price of insurance, income level of individual, availability of substitute and other individual and
environment specific characteristics. Further, they experimented with demographic variables like age of individual
insured(s) and population within the age group of 25 to 64 and also considered education level to have some bearing on
insurance consumption decision. They concluded the existence of higher income inelasticity of demand for life
insurance in Mexico with low income levels. Age, education and income were significant factors affecting demand for
life insurance in both countries.
Truett and Truett (1990) studied the impact of education on insurance. He found out that an increase in the number of
educated people in a country may be associated directly with a greater recognition of various types of products offered
by life insurance companies, leading to higher levels of demand. Browne et al’s (1993), assumption that inhabitants of
a country are homogeneous relative to those of other countries, expanded the discussion on life insurance demand by
adding newer variables namely, average life expectancy and enrollment ratio of third level education. The study based
on 45 countries for two separate time periods (1980 and 1987) concluded that income and social security expenditures
are significant determinants of insurance demand, however, inflation has a negative correlation. Dependency ratio,
education and life expectancy were not significant but incorporation of religion, a dummy variable, indicates that
Muslim countries have negative affinity towards life insurance.
Browne and Kim (1993) studied the positive influence of education on life insurance demand through its effect on the
period of dependency. He concluded that individuals educated over longer periods forgo the opportunity of full-time
employment, and extend their reliance on the income stream of other working members of the family, increasing the
demand for policies. It can also be proposed that these effects are exacerbated by the income effect of education.
Browne and Kim (1993) studied the impact of inflation on life insurance. He concluded that inflation has a 'dampening
effect' on demand for products offered by life insurance companies, as it erodes the real value of these products.
Brown and Kim (1993) studied the ratio of total expenditure on life insurance premiums to the amount of life insurance
in force, and found that price is negatively related to life insurance consumption with an estimated price elasticity of 0-
24 , suggesting that demand is price elastic. Rubayah and Zaidi (2000) studied the effect of interest rates on life
insurance demand. He identified significant negative relationships between the demand for life insurance and both
interest rate measures.Enz (2000) studied the affect of income on insurance and found out that at higher levels of
income insurance, consumption becomes less sensitive to income growth as insurance product saturation is reached.
The main reason for this phenomenon is that at high- income levels, consumers become so wealthy that they can afford
to retain risk and start saving. Esho et al. (2002) studied the affect of cultural factors on life insurance. He concluded
that the demand for insurance is unaffected by cultural factors. Ward and zurbruegg (2002) did examine the impact of
legal and political determinants on life insurance consumption within Asia and OECD countries. They concluded that
in Asia, an improvement in the legal system has a significant and positive impact on life insurance demand. However,
in the OECD countries, the functioning of the legal system was found to be insignificant. Beck and Webb (2003) also
studied the positive impact of education on life insurance. He concluded that a better understanding of the benefits of
risk management and long-term savings may encourage risk aversion. Hwang and Gao (2003) studied several reasons
to explain why life insurance consumption should rise with income. Firstly, there is no reason to believe that insurance
is anything other than a normal good, in the sense that consumption is rising in income. Also, if consumption levels fall
relative to income, there follows a need for financial instruments to absorb surplus funds, enabling greater
accumulation of wealth .Secondly, as a person's level of income rises, so too does the opportunity cost of dying. Thus,
the desire to maintain living standards of dependents generates larger policies. According to Beck and Webb (2003), a
higher real interest rate increases LIC investment returns and thus their profitability, in turn offering greater
profitability of financial relative to real investments for potential purchases of life insurance policies. However, results
of neither study offer any evidence to support the hypothesized relationship. Lim & Haberman (2004) studied the
effect of interest rates on life insurance demand. He concluded that higher interest rates might be expected to reduce
demand as higher yields on alternative savings products makes life insurance less attractive. Wasaw and Hill (1986) ,
Brown and Kim (1993), Enz (2000) and Ward and Zurbruegg (2002) studied that whether countries with a strong
Islamic background does dampen demand for life insurance consumption. They found that Consumers in Islamic
nations purchase less life insurance policies. Brown and Kim(1993) , Ward and Zurbruegg (2002) studied the impact of
social welfare provision on life insurance demand. They concluded that the needs for individuals to make private
provision against longevity or early death via life insurance are reduced when government spending on social security
is increased. La Porta et al. (1997, 2000) and Levine (1998, 1999) studied the impact of legal and political factors on
life insurance demand. They concluded that a legal environment, which provides good investor protection tend to
encourage a higher degree of financial intermediation as well as economic growth. Hammond et. al. (1967), Drucker
(1969) and Berekson (1972) reveal that one of the main purpose of life insurance is to protect dependants against
financial hardship in the case of a wage earner's premature death. Beenstock et. al (1986), Brown and Kim (1993),
Outreville (1996) and Ward and Zurbruegg (2002) assumed that the longer people expect to live, the greater it will be
for life insurance. They find a positive relationship between life expectancy and life insurance demand. Yaari (1965)
studied the problem of uncertain lifetime and life insurance. Including the risk of dying in the life cycle model, he
concluded that an individual increases expected lifetime utility by purchasing fair life insurance and fair annuities.

1. To know the awareness level of working women towards life insurance.
2. To know the motives behind taking insurance policy.
3. To identify the factors perceived by working women for selecting the life insurance products.
4. To find out the gap between expectation and satisfaction of working women regarding insurance .
RESEARCH METHODOLOGY
The study for exploring the factors affecting the decision to purchase Insurance Products was carried out on working
women. A sample of 170 working women was taken and the questionnaire was distributed online and offline (offline
survey was done in N. Delhi, Moradabad and Varanasi). The sampling Technique was convenience sampling. The
researchers received the responses of 127 respondents, out of which, 15 questionnaires were rejected due to
ambiguous data, missing data and in some cases, to maintain accuracy of the analysis. The respondents were young
working women in the age group of 23-39 years. Type of questionnaire was structured, non-disguised and questions
were closed ended with application of Likert scale.
PRE-TESTING OF THE SURVEY

The survey instrument was revised with the help of female faculty members of different management institutes of
North Delhi, Moradabad and Varanasi and to strengthen its validity, the questionnaire was circulated among these
faculty members. Based on the feedback received from the pretested sources, the questionnaire was modified. The
main purpose of the pretest was to validate the questions of the study.
DATA ANALYSIS AND INTERPRETATION

A profile of the sample population, including age, marital status and income is shown in Table 1. There were 48
unmarried and 64 married working women in the study. The mean age of sampled working women was found to be
28.214 years and average annual income as ` 2,70,535.714.
Table 1: Profile of The Respondents
Age No. of Respondents Percentage
Below 25 12 10.714
25-30 68 60.714
30-35 24 21.428
Above 35 8 7.142
Mean Age - 28.214
Marital Status No. of Respondents Percentage
Married 64 57.15
Unmarried 48 42.85
Annual Income No. of Respondents Percentage
Less than 1,50,000 12 10.714
1,50,000-3,00,000 64 57.142
3,00,000- 4,50,000 28 25
More than 4,50,000 8 7.142
Average annual Income - ` 2,70,535. 714
Insurance is a product, which often people do not buy. There is need of motivators, who motivate the individual to
purchase a particular policy. In case of working women, these motivators can be different than others. From Chart no.
1, it is very much obvious that the motivators in case of working women are mainly parents and husband, although
Insurance agents and Tax advisors also play a significant role in helping working women to decide about the insurance
products. The next question was related with the information collection after awareness and motivation to purchase the
insurance product. The result of the survey says that most of the working women (58%) even do not care to collect
some more information before actual purchase. The next question of the survey was to know the person who is paying
insurance premium of working women. The result is depicted in Chart No 2.
Chart 1: People Influencing The Purchase Chart 2: Person Who Pays The Premium
Of Insurance Policy
Insurance Agents Husband
11% 11% Any other
0%
Tax Advisor Parents
11% 11%
Parents
40%
Colleagues
3%
Siblings
7%
Self
Husband 78%
28%

From the Chart No 2, it is obvious that mostly, the premium is paid by self, but in some cases, the premium is paid by
either the Husband or parents too. It is also important to know that both married and unmarried working women have
been considered for the study. If we confined our study to married women only, than out of 64 married working
women, premium of 12 (18.75%) is being paid by Husband and of 3 (3.57%) is being paid by parents. The next
question was to know that whether these working women also pays premium for others, then 88 (78.57%) respondents
response was in negative. From Chart No. 3, it is clear that most of the working women pay the premium for their
children and no women were found to pay premium for their parents. Here, one more important finding was that sibling
means sister only i.e. 17% working women pay the premium for their sisters.
There were some questions related to the companies and products where working women have invested their money.
The aim of these questions was not only to find out the most trusted name of life insurance and the most liked product of
these companies, but to know the awareness level of these women too. The results are given in Graph 1.
Chart 3: For Whom The Premium Is Paid Graph 1: Name of the Company
Parents 72
0%
Sibling 64
17%
56
48
40
Series1
Series2
32
Husband
18% 24
16
Children
65%
8
0
LIC Bajaj Allianz Tata AIG ICICI Prudential Kotak Mahindra Aviva Life Max Newyork Life
Insurance Insurance
From the above Graph No. 1, it can be concluded that maximum number of women have invested their money in LIC
and both private players- ICICI Prudential and Max New York life insurance occupy the second place. Here, the total
no. exceeds 112, as respondents have option to tick more than one. The next question was to know the different type of
plans which are chosen by working women.
Graph 2 : Types of Insurance Plan
48
40
32
24 Series1
16
0
Children Plan Endowment Plans Money Back Unit Link Special Money Joint life Policy Any Other (Please
Plans Insurance Plans Back Policy For Mention)
Women

It is shown in the Graph No 2 that the maximum number of women have invested their money in money back and unit
link plans. There were 16 women who have invested in pension plans too. Next question was to mention the name of
the plans, which has shown poor awareness level of working women. Only 18 women were able to mention the correct
policy name along with the name of company and rest did either not know or they were telling the plan type only.
There was a question to know the mode of premium payment. The result of which is shown in Chart 4.
Chart 4: Mode of Paying Premium Graph 3: Frequency Of Premium Payment

80
Any other Online
11% 14% 72
64
56
48
40 Series1
32
24
16
Agent 0
75% Monthly Quarterly Half Yearly Yearly
The Chart 4 clearly mentions that 75% of women paid premium through their agent from whom they have taken their
policy. There are some women (14%) who pay the premium in the offices of insurance company either themselves in
person or send someone to pay the premium in the office of insurance company. The next question was to know the
frequency of premium payment. Here, 8 respondents have marked more than one frequency as they have chosen
different frequency for payment for different policies. The result is presented in Graph 3. From the Graph 3, it is clear
that maximum number of women prefer to pay premium only once in a year. Next question was to know the annual
amount which the working women spend for insurance policies. From the Chart 5, it is obvious that 71% women pay
the annual premium of ` 10,000-30,000. The average annual Income of working women is found to be `
2,70,535.714. For this average salary, the Income tax lies between ` 10,000-30,000.
Chart 5: Annual Amount of Premium Graph 4: Objective of Insurance
More Than 50,000 Below-10,000 100
4% 11%
30,000-50,000
14%
80
60
Series1
40
20
0
10,000-30,000 Tax Saving Family Protection Children Education, Post Retirement Appreciation of Any other ( Please
71% Marriage Benefit Wealth. Specify

It is very much obvious that most of the working women purchase insurance plan for tax benefit, which is confirmed by
the next question, which was related with the objective of investment in insurance. The result is presented In Graph 4.
This Graph 4 clearly confirms our assumption and tells us that the main objective of taking insurance policy is to get
tax benefit. Other prominent reasons were appreciation of wealth and family protection. The primary concern of this
paper is to determine overall expectation and satisfaction levels among women and determine specific attributes that
contribute to their level of satisfaction and find the gap between expectation and satisfaction for these attributes. The
survey asked very simple questions just to give points for various attributes on the Likert scale of 5. On the basis of
these points, an average point for each attributes has been calculated. Differences in expectation and satisfaction
between these attributes were explored using Chi-Square test. The Graph 5 for customer expectation is given below.
Graph 5 : Customer Expectations Towards Various Attributes
90
82.857
80 77.142 77.857
75.714
70 67.142
63.571
60 57.142
50.714 52.142
P er cent age
50
40 35.714
29.285
30
20
10
0
g
nt
e
er
ge
n
ce
m
e
nt
n
in
tio
ur
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Graph 6: Customer Satisfaction Towards Various Attributes
100
90 87.857
84.285
80 77.857 77.857
75.714
70
60 60.714
60 57.142
P ercentage
50
40
30
20
10
0
Attractive Risk coverage Convenience in Company’s Husband/ father Private/ Public Documentation Payout option
Return paying premium Brand Name advice player procedure

It can be concluded from the Graph 5 that risk coverage attribute is the most influential attribute at the time of purchase
of policy and company's brand name, husband / father’s advice equally influences the purchase decision of a woman.
The satisfaction level regarding these attributes is given in the Graph 6 .This graph clearly mentions high satisfaction
level of working women regarding these attributes. If we compare these two graphs, then the picture is given in Graph
7.
Graph 7: Comparison Between Customer Expectation and Satisfaction For Various Attributes
100
90
80
70
60
P ercentage
Customer Expectation
50
Customer Satisfaction
40
30
20
10
n
ge
er
e
e
m
n
io
ur
ic
ur
am
iu
ay
ra
pt
dv
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et
em
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From the Graph 7 itself, it can be drawn that the customers are satisfied and there is no gap between expectation and
satisfaction level. To confirm it,we use Chi- square test with the null hypothesis as There is no difference in expectation
and satisfaction of working women regarding insurance services.
Table 2 : Chi-Square Test
Attributes Expectation Index Satisfaction Index
Attractive Return 75.714 75.714
Risk coverage 82.857 84.285
Convenience in paying premium 67.142 87.857
Company's Brand Name 77.142 77.857
Husband/ father advice 77.857 77.857
Private/ Public player 63.571 60
Documentation procedure 50.714 57.142
Payout option 52.142 60.714
The value of Chi- square coefficient is 8.8469. The degree of freedom for this problem is (8-1)x(2-1)= 7. For 7 degrees
of freedom, the critical value is 14.1 at 5% level of significance. That approves our null hypothesis i.e. there is no
difference in expectation and satisfaction level of working women regarding insurance.
CONCLUSION
From the above analysis, it can be easily concluded that the decision to purchase an Insurance policy is mainly affected
by the advice of Father/ Husband and even women blindly follow advice of their family without searching for more
information regarding the policies. The main objective of purchasing policies for working women is to save income
tax. Majority of the working women have invested their money in government approved LIC because they are risk
aversive. Most of the women do not even remember the name of policy they have purchased. Risk coverage,
Company's brand name and Father/ husband’s advice are the most influential attributes for the purchase of insurance
policy by them. Working women are satisfied with the attributes for which they invested their money. In fact, there is
no significant difference in their expectation and satisfaction level. Although the Insurance in India is an industry
which is almost one and a half centuries old, having begun in the 1850s with the Tital Insurance Company, the
insurance industry still has a long way to go in addressing problems related with working women.
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22) Showers, Vince E. and Joyce A. Shotick, 1994, The Effects of Household Characteristics on Demand for Insurance: A Tobit Analysis, The Journal of Risk and
Insurance, Vol. 61, No.3, 492-502
23) Schlesinger, H. (1981) The optimal level of deductibility in insurance contracts, Journal of Risk and Insurance, 48, 465-481.
24) Szipiro, G. G. (1985) Optimal insurance coverage, Journal of Risk and Insurance, 52, 705-710.
25) Truett, D. B. and Truett, L. J. (1990) The demandfor life insurance in Mexico and the United States: A comparative study, Journal of Risk and Insurance, 57,2,
321-328.
26) Wasaw, B. and Hill, R. D. (1986) The Insurance Industry in Economic Development, New York University Press, New York.
27) Ward, D. and Zurbruegg, R. (2002) Law, politics and life insurance consumption in Asia, The Geneva Papers on Risk and Insurance, 27,3, 395-412.
28) Yaari, M. (1965) Uncertain lifetime, life insurance and the theory of the consumer, Review of Economic Studies, 32, 137-150.
29) Xumei Zhang, Yingxiu Zhang, Hanguang Qiu, Bin Dan (2007) An Empirical Study Of The Key Factors Affecting Consumers' Purchase Decision On Life
Insurance, International Conference on Service Systems and Service Management, 2007 , page 1-5.
30) Country Insurance and Financial Services, PR Newswire, “Women Lag Behind Men on Life Insurance Coverage”, May 2007.
31) Annual MetLIfe Study of Employee Benefits, Press Release August 2008.
32) http://www.prudential.com/media/managed/2006WomenBrochure_FINAL.pdf

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November 10 IJM Final

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` 100/-

Microsoft’s Windows Vs. Google’s Chrome - Who Sanjeet Kaur

Winning Customers Through Service Innovation - Dr. Vinay Kumar Nagu

CRM Practices In The Asia Pacific Industry- R. Ruma Agnes

Customer Acquisition And Retention Strategies Dr. V. Murugaiah

Impact Of Brand Preference Dimensions On Customer Dr. C. Dharmaraj

A Study On Customers’ Attitude Towards Online Dr. Neelotpaul Banerjee

A Critical Review Of Gender Differences In Online Prashant D. Amin

OTHER INTERNATIONAL LISTINGS (INDIAN JOURNAL OF MARKETING)

In addition, Indian Journal of Finance and Prabandhan : Indian Journal of

The management of Indian Journal of Marketing, Indian Journal of Finance and

Mrs. Satya Gilani

With Best Wishes,

Indian Journal of Marketing • November, 2010 1

*Lecturer, Institute of Management Studies, Dehradun, Uttarakhand. Email : khuranasanjeet@gmail.com

WHAT AN OS IS ALL ABOUT AND THE NUMBER OF USERS AFFECTED BY IT

Iceland 202,300 (2007)

Graph 1: Asia Top 10 Internet Countries

4 Indian Journal of Marketing • November, 2010

Europe 803,850,858 105,096,093 425,773,571 53.0 % 305.1 % 23.6 %

Oceania / Australia 34,700,201 7,620,480 21,110,490 60.8 % 177.0 % 1.2 %

Indian Journal of Marketing • November, 2010 5

Category Windows Linux Mac

There are more than 150,000 . than any other

6 Indian Journal of Marketing • November, 2010

8 Indian Journal of Marketing • November, 2010

PERVASIVE CUSTOMER MANAGEMENT APPLICATIONS PROVIDE THREE

RELATIONSHIP MARKETING MYOPIA

MERU: REDEFINING THE 'TAXI' EXPERIENCE

THE TAG LINE OF MERU- RELY ON US

LOST AND FOUND

SERVICE INNOVATION AT MERU CABS

CARD PAYMENT FACILITY AT MERU CABS

SOME OF THE OTHER IMPORTANT ISSUES TO LOOK INTO BY MERU CABS

Indian Journal of Marketing • November, 2010 13

*R. Ruma Agnes

CRM - WHAT IT IS ALL ABOUT?

MANAGE RELATIONSHIPS FOR PROFITABILITY

INSURANCE IN THE ASIA PACIFIC REGION

ESTABLISHED MARKETS (AUSTRALIA, SINGAPORE, HONG KONG)

HIGH POTENTIAL MARKETS (INDIA, CHINA)

NEW START MARKETS (SOUTH KOREA, MALAYSIA, SRI LANKA AND

Country Industry Outlook

Indian Journal of Marketing • November, 2010 19

CRM - SUCCESS AND FAILURE

CRM - CHALLENGES AHEAD

Indian Journal of Marketing • November, 2010 21

OBJECTIVES OF THE STUDY

HYPOTHESIS OF THE STUDY

MATERIALS AND METHODS

RESULTS AND DISCUSSION

VARIABLES CAUSING SWITCHING AND RESULTING IN DEFECTORS

24 Indian Journal of Marketing • November, 2010

% OF TOTAL SWITCH OVER

SERVICE PROVIDER TCS WOM ADVT. ACTIVE SEARCH ACCIDENTLY OTHERS

26 Indian Journal of Marketing • November, 2010

STRATEGIES FOR ACQUISITION AND RETENTION

Indian Journal of Marketing • November, 2010 27

CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW

STATEMENT OF THE PROBLEM

OBJECTIVES OF THE STUDY

ANALYSES AND DISCUSSIONS

INFLUENCING FACTORS TOWARDS BRAND PREFERENCE-

INFLUENCING FACTORS TOWARDS BRAND PREFERENCE-

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