TITLE: “STRATEGIC ANALYSIS OF CONSUMER SPENDING BEHAVIOR THROUGH CREDIT

CARDS DURING RECESSION”

AIM & OBJECTIVE:

Main Objective:

To understand credit card brands in the financial industry market and to know
consumer buying behavior in through credit cards.

Secondary Objectives:

To understand the customer perceptions about credit cards

To identify the parameters in the buying behavioral process
To understand the sales processes of credit cards
To identify the information obtained after the purchase activity from customers
To identify the initiators of using credit cards in buying process
To identify the purchase level through credit cards after economic slowdown.

Scope

Since credit card plays an important role in consumer finances it is useful for studying the
consumer’s behavior. The economic down turn which the economy faces today is also due to the
excess spending of card holders in the past. Thus it leads to a feeling of the pinch of shrinking
home values and job threatens. Thus now consumes are alert about the risk involved in using
credit cards as a result of the media coverage of debt issues concerning credit cards.

METHODOLOGIES:

The present study attempts will be made to study whether the consumers spending habit have
decreased using credit cards during the economic slowdown. Thus views of credit card holders
and managers have been examined using a structured questionnaire.
The research methodology for this thesis as follows:

1. Primary Data will be collected by interviewing the following people

a) Credit card holders

b) Credit card sales officers
c) Sales Managers
d) Experts

2. Secondary Data will be based on the study on the different credit card brands in the
market.

PLAN OF THE PROJECT:

Literature review will be collected from online articles & books. A well framed questionnaire
will be prepared after incorporating the information collected through pilot survey. The primary
data will be collected through questionnaires and informal interviews with the Sales Managers,
Sales officers, Experts within the organization and as well as the customers. The secondary data
will be collected through internet, company details obtained from the organization and though
various marketing books. The data collection will be done for a period of one month. Based on
the data collected various charts will be drawn and findings & recommendations will be sorted
out.

Justification

This problem is a current hot topic. So there is a need to understand the consumer
behavior on this topic. Moreover it is predicted that this Economic Recession will continue for at
least 2 years, thus this study will definitely help to understand the spending habit using credit
card holders in this tough time in history. Also this project will touch upon the cause and effect
of more spending habits through Credit Cards.
 REFERENCES:
Can be used
 http://biztrends.com/2006/09/business-down-signals-economic-slowdown.html
 http://timesofindia.indiatimes.com/articleshow/3917506.cms
 http://www.indianrealtynews.com/retail-market/lifestyle-retailers-on-a-roll-despite-
economic-slowdown.html
 http://www.thehindubusinessline.com/catalyst/2009/02/stories/2009021250010100.htm
 http://www.hsbc.co.in/1/2//personal/credit-cards
 http://www.icicibank.com/Personal-Banking/cards/Consumer-Cards/Credit-
Card/personal-banking-credit-cards.html

Books:

Understanding Consumer Decision Making: The Means-End Approach to Marketing

and Advertising Strategy 

By Jerry C. Olson, Thomas J. Reynolds. 

Consumer Behavior in Indian Cont.

By   Jain & Monica Bhatt

   

CASE STUDY: View from Harvard Business School

Customer buying behavior after recession

It’s likely that the brands, tactics, and strategies you took into the recession are not going to be
what you need to bring back customers as we recover. Too much has happened. People have lost
faith not only in Wall Street brands, but all corporate brands to an extent. They’ve also learned
the value of savings, the high cost of credit, the sudden uncertainty of financial markets, their
vulnerability to job loss. All these shifts affect buying behavior. What also has changed, most
likely, are your priorities as a manager or owner.  Cash is king again. Inventory is death. True
partnerships are golden. The price has to be right. Experimentation is necessary but too many
bad bets are draining. Flexibility trumps consistency.

So how does all this change how you reach your customers when the bear turns into a bull again?

1. Focus on high potential customers

2. Don’t assume a return to normal

3. Asses your target customers trust in your brand

4. Stay focused on costs

5. Know your lead indicators

6. Develop scenarios

7. Don’t wait for permission

These are all excellent points, but I was most struck with “Know Your Lead Indicators.”

What Quelch argues is that you have the best insight into your own customers. So use that
knowledge to competitive advantage. Says Quelch:

Every good marketer knows the specific indicators, macro or micro that predicts demand for his
or her product in the next period. Use common sense. If the Wal-Mart parking lot looks less
crowded, some consumers are probably migrating back to Target and vice versa.

Source: http://blogs.bnet.com/harvardbusinessreview/?p=1045